WALT: Weighted Average Lease Term
One number for how long a building's income is good for — and the headline figure on almost every sell-side listing. It is also an average, which means it hides exactly the things worth knowing. Here is how to read one, and the three ways a published WALT is quietly wrong.
What it is, and what it is for
WALT is the average time remaining on the leases in a building, weighted by each suite’s share. Multiply each occupied suite’s remaining years by its weight, add them up, divide by the total weight. Vacant space is left out, because there is no term to average.
It earns its place as a headline because it compresses a whole rent roll into one honest-sounding number: how long before the market gets a say in this income. A listing broker leads with it for exactly that reason.
It is also derived, not recorded. WALT is a pure function of the rent roll and the date you ask on — it changes every single day without anyone touching a record. A WALT quoted on a marketing package is true as of whenever that package was produced, and a stored one is stale by definition.
Two buildings, the same 3.1 years
The example that makes the case for never quoting a WALT on its own.
| Building | The rent roll | WALT | Already expired |
|---|---|---|---|
| A | Two 50,000 SF leases, both running about three more years | 3.1 yrs | 0 SF |
| B | One 50,000 SF lease expired last year, one running six more | 3.1 yrs | 50,000 SF |
Both roll to 3.1 years. Both weight the full 100,000 SF. On a summary page they are the same building.
They are not remotely the same building. Building B has half its income on month-to-month holdover today — a tenant that can leave on thirty days’ notice, and a lease that has to be renegotiated before anything else about the deal is knowable. Its other tenant is locked for six years, which is what drags the average back up to look ordinary.
Space already past expiry is the largest silent distorter of a WALT, because it enters the average at zero and nothing about the resulting number says so. Ask how much of the building is holding over before you read anything into the average.
The second way it misleads: what the average covers
A WALT is computed over whatever the rent roll could actually weight. Vacant space has no term. A suite with no expiration date on file has no term either — unknown, not zero. Both drop out, and the average that comes back is an average of what was left.
Take a 100,000 SF building:
| Suite A — 40,000 SF, expires 2031 | weighted |
|---|---|
| Suite B — 25,000 SF, expires 2028 | weighted |
| Suite E — 8,000 SF, expires 2033 | weighted |
| Suite C — 15,000 SF, vacant | no lease, so no term to weight |
| Suite D — 12,000 SF, no expiration date on file | unknown, not zero |
The WALT is 4.12 years. It was computed over 73,000 SF — 73% of the building. The other 27,000 SF is not in it: 15,000 vacant, and 12,000 occupied by a tenant whose expiration date nobody recorded.
Presented as “WALT: 4.12 years” that is a confident number about a building it does not describe, and it fails silently — the figure looks completely normal. The right question is never “what is the WALT”. It is “what is the WALT, and over what?”
The third: an average is not a schedule
Even a clean WALT over the whole building tells you nothing about when. Four leases averaging five years could be four expirations spread evenly across a decade, or all four landing in year five. The first is a manageable building. The second is a cliff, and both report the same average.
Concentration is the same problem in a different direction. A WALT of eight years is excellent right up until you notice that seven of those years are one tenant occupying 60% of the building — at which point it is not a lease term, it is a single counterparty exposure with a date on it.
Neither is visible in the average. Both are visible the moment you look at expirations year by year, which is why the expiration schedule is the thing to ask for and the WALT is the thing you are given.
Reading a published WALT
- 1
What date is it as of?
WALT changes daily. A number from a package produced four months ago is four months wrong, in a knowable direction.
- 2
Over what square footage?
Vacant space and suites missing an expiration drop out. If the weighted SF is not stated, the average may cover much less of the building than it appears to.
- 3
How much is already holding over?
Expired leases enter at zero years and pull the average down invisibly. Two buildings with the same WALT can differ entirely on this one figure.
- 4
Weighted by rent or by area?
Area weights a warehouse bay like prime retail. Rent weights what is actually at risk. Compute both — a wide gap means space and income are exposed on different schedules.
- 5
Does it include renewal options?
It should not. An option is the tenant's right, not your expectation. If options are included, the number is materially different and should say so.
- 6
What does the schedule look like?
Finally, ignore the average and read the expirations year by year. Clustering and concentration are the actual risks and neither shows up in a mean.
Frequently asked questions
What is WALT in commercial real estate?
WALT is weighted average lease term — the average time remaining on the leases in a building, weighted by each suite's share. Weight by square footage and you get the average term across the space; weight by rent and you get the average across the income, which is usually the more useful of the two. It answers one question in one number: how long is this income good for before the market gets a say.
How is WALT calculated?
For each occupied suite, take the years remaining until its lease expires, multiply by that suite's weight — its square footage, or its rent — then divide the total by the sum of the weights. A suite with 40,000 SF and six years left contributes far more than one with 5,000 SF and ten. Vacant space is excluded, because there is no lease term to average.
What is a good WALT?
Longer is safer and shorter is more flexible, and which you want depends on your thesis. A stabilized core buyer wants a long WALT with staggered expirations — predictable income, nothing to do. A value-add buyer often wants a short one, because rolling leases are how below-market rents get marked to market. What nobody wants is a long WALT that turns out to be one tenant, or a short one nobody noticed until the offer was in.
Should WALT be weighted by rent or by square footage?
By rent, if you have to pick one. Square footage weights a warehouse bay the same as a prime ground-floor retail unit paying five times the rate, and the income is what is actually at risk when a lease expires. Weighting by square footage is more common because it is easier and because it is what a rent roll always supports, so the practical answer is to compute both and look at the gap. A large divergence means the income and the space are exposed on different schedules.
Does WALT include renewal options?
Not normally, and it should not. An option is the tenant's right, not the landlord's expectation — counting it extends the average on the strength of a decision nobody has made yet. Treat the option as upside to model separately, not as term. Where a WALT is quoted as including options, that should be stated explicitly, because it is a materially different number.
Why can two buildings have the same WALT and different risk?
Because an average hides its distribution. Two even leases at three years each, and one lease already expired alongside one running six more years, both produce a WALT of 3.1 years — but the second building has half its income on month-to-month holdover today. WALT is the start of the question, not the answer. Always read it alongside the expiration schedule and the share of space already past expiry.
What is lease rollover risk?
The risk concentrated in when leases expire rather than in how long they run on average. It shows up as clustering — several leases ending in the same year — and as concentration, where one tenant carries a large share of the income. Both are invisible in a WALT and both are visible in a year-by-year expiration schedule, which is why the schedule is the thing to ask for.
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The document WALT is derived from, suite by suite.
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A WALT is only worth what the rent roll behind it is worth.
DealWise AI derives WALT from the leases it read — and reports what carried the average, what was left out and why, and how much of the building is already holding over. A number you cannot reconcile is not a number you should act on.