Operations
Leasing
How institutional CRE leasing actually works. TI allowances, broker commissions, renewal probability, free rent abatement, and co-tenancy clauses. The mechanics, market standards, and pro forma modeling that determine a property's leasing economics.
Leasing is where property economics meet tenant decisions. The concession package a landlord offers (TI, free rent, broker commissions) determines the effective rent the property actually earns. The renewal probability assumptions an analyst sets determine how much turnover cost the pro forma absorbs. And in retail, co-tenancy clauses can turn a single anchor departure into a revenue cascade that reprices the entire center.
These five articles walk the core leasing variables one by one. Start with tenant improvement allowances if you are negotiating or modeling a lease concession package. Start with renewal probability if you are building rollover assumptions in a DCF. Start with co-tenancy if you are underwriting a retail acquisition with anchor exposure. Each piece carries the institutional framework, 2026 market data, and a worked example showing how the variable flows through a pro forma.
5 articles
Tenant Improvement Allowances in Commercial Real Estate: Market Standards, Negotiation, and Pro Forma Impact
How TI allowances are structured, negotiated, and modeled in institutional CRE. Per-square-foot ranges by property type, the three disbursement methods (lump sum, draw schedule, turnkey), ASC 842 accounting treatment, and a worked 10,000 SF office lease showing effective rent erosion. With 2026 market data.
Leasing Commission Structures in Commercial Real Estate: Broker Compensation, Co-Brokerage Splits, and Pro Forma Modeling
How leasing commissions are calculated, who pays them, and how they flow through a pro forma. Rate ranges by property type for new leases and renewals, the percentage-of-aggregate-rent vs per-square-foot methods, co-brokerage splits, override commissions, and a worked rollover cost analysis.
Renewal Probability and Lease Rollover Analysis by Tenant Type in Commercial Real Estate
How institutional investors set renewal probability assumptions by tenant type, credit quality, and remaining lease term. The two-scenario weighted model (renew vs vacate), lease expiration concentration risk, turnover cost vs retention cost, and a worked 10-tenant office building rollover analysis.
Free Rent and Abatement in Commercial Leases: Effective Rent Calculation and Accounting Treatment
How free rent concessions work economically and under GAAP. The effective rent formula (simple and NPV methods), 2026 market data on free rent months by property type, ASC 842 straight-line rent treatment, and a worked comparison of two lease proposals with different concession structures.
Co-Tenancy and Kick-Out Clauses in Retail Leases: How Anchor Departures Cascade Through Inline Revenue
How co-tenancy clauses work, what triggers them, and how a single anchor departure can cascade through inline tenant leases to create revenue losses far exceeding the anchor vacancy. Opening, operating, and continuous co-tenancy types, the dark anchor problem, remedies (rent reduction, percentage rent only, termination), and a worked 200,000 SF grocery-anchored center scenario.