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WALT calculator: weighted average lease term by rent or area
Enter each lease's area, annual rent and expiry month to get the weighted average lease term (WALT, also called WALE) as of any month, weighted by rent and by area, with the share of rent and area expiring each year and within the next three years. Works in Canadian or US dollars; nothing leaves your browser.
Results
- WALT by rent
- 3.69 years
- WALT by area
- 3.95 years
- Leases counted
- 4
- Leased area
- 29,000 sq ft
- Annual base rent
- $518,000
- Rent expiring within 3 years
- $266,000 (51.35%)
- Area expiring within 3 years
- 13,000 sq ft (44.83%)
| Year | Area | % area | % rent |
|---|---|---|---|
| 2028 | 5,000 | 17.2% | 25.1% |
| 2029 | 8,000 | 27.6% | 26.3% |
| 2031 | 12,000 | 41.4% | 34.7% |
| 2034 | 4,000 | 13.8% | 13.9% |
Works in Canadian or US dollars: enter every amount in the same currency. Calculated in your browser; nothing is sent or saved.
How it’s calculated
- Remaining term
Years remaining = months from the as-of month to the expiry month ÷ 12 (0 if already expired) - WALT by rent
WALT = Σ (annual rent × years remaining) ÷ Σ annual rent - WALT by area
WALT = Σ (leased area × years remaining) ÷ Σ leased area - Vacancy
Vacant units are left out: WALT describes the leases in place, not the building
Worked example (illustrative numbers)
- A four-unit building is fully leased as of January 2027: Unit 1, 12,000 sq ft at $180,000 a year to December 2031; Unit 2, 8,000 sq ft at $136,000 to June 2029; Unit 3, 5,000 sq ft at $130,000 to March 2028; Unit 4, 4,000 sq ft at $72,000 to August 2034.
- The remaining terms are 4.92, 2.42, 1.17 and 7.58 years. Weighted by rent ($518,000 in total) the WALT is 3.69 years; weighted by area (29,000 sq ft) it is 3.95 years. The rent-weighted figure is lower because Unit 3 pays the highest rent per square foot and expires first.
- Within three years, $266,000 of rent (51.35%) and 13,000 sq ft (44.83%) of area expire: Unit 3 in 2028 (25.10% of rent) and Unit 2 in 2029 (26.25% of rent).
Illustrative figures for fictitious units; they are not market rents or lease terms for any building, property type or city.
What WALT tells a buyer
The weighted average lease term (WALT, or WALE for weighted average lease expiry) summarizes how long the income in a multi-tenant property is contracted for. A simple average of lease terms treats a small unit the same as the anchor tenant; weighting by rent or by area makes each lease count in proportion to its importance.
Buyers and lenders read WALT next to the cap rate and occupancy: a long WALT means more contracted income and fewer leasing decisions in the near term, while a short WALT signals rollover the buyer will have to manage. Neither is good or bad on its own; a short WALT on below-market rents can be the opportunity.
Rent-weighted or area-weighted?
Rent weighting is the usual basis for investment analysis because it reflects the income at risk. Area weighting is useful when rents are missing or not yet confirmed, or to show how much space rolls over. When the two differ widely, as in the example, the gap itself is informative: the leases that pay the most per square foot are expiring earlier or later than the rest.
Whichever basis you use, state it beside the figure, together with the as-of date. A WALT quoted without a date gets shorter every month the listing is on the market.
What WALT hides
One number cannot show the expiry profile. A WALT of four years could be one lease expiring next year and another in eight, or every lease expiring in four years. That is why this calculator also shows the area and rent expiring each year and within three years, the figures buyers turn to next. Options to renew or terminate early, and tenants on month-to-month terms, also change the picture: say how you treated them.
Arithmetic only. This is not an appraisal, a valuation opinion, or financial, legal or tax advice.
Showing WALT in an offering memorandum
Put the WALT in the investment summary with its basis and as-of date, then support it with a rent roll and a lease expiry chart so buyers can check it. In OfferingStack, the rent roll pages calculate WALT from the leases you enter, weighted by rent when every lease has a rent and by area otherwise, and print the basis beside the figure; vacant units are excluded, and leases without an expiry date mean no WALT is calculated. If you type in a WALT yourself, it is shown as supplied, and when it differs from the rent roll the page notes the calculated figure so the two can be reconciled.
Questions
How do you calculate WALT?
Multiply each lease's remaining term in years by its annual rent (or its area), add the results, and divide by the total rent (or total area). In the example, $1,911,333 of rent-years ÷ $518,000 of rent = 3.69 years.
What is the difference between WALT and WALE?
Nothing in practice: weighted average lease term and weighted average lease expiry are two names for the same measure. WALE is more common in Australia and parts of Europe; WALT is often used in North America.
Should vacant space be included in WALT?
Usually not. WALT describes the leases in place, so vacant units are left out and the vacancy is shown separately as occupancy. Some analysts also show a figure with vacancy at zero years; if you do, label it clearly.
How are renewal options treated?
Most summaries use the current expiry date and ignore unexercised options, because the tenant may not renew. If you show a WALT including options, label it as such and show the firm-term figure as well.
Is my data saved?
No. The calculation runs in your browser and nothing you type is sent to OfferingStack.
Related
Put the numbers in a finished offering memorandum.
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