How do Adverse Market Conditions Affect Lease Renewals? – By Laura Lamont

In general, one may associate adverse market conditions with high vacancy rates, declining rental rates, and tenant-friendly incentives. Landlords are offering prospective tenants free rent, increased tenant improvements, and at times, moving allowances. Despite an abundance of tenant perks, why do some leases, especially renewal leases, remain at previous market levels or actually increase?

In the next issue of Valuation Viewpoint, available in late May or early June, we will propose some answers to this and additional questions.