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  • Writer's pictureJay Anderson

Understanding WALE: The Importance of Weighted Average Lease Expiry in Commercial Real Estate

Updated: Jun 6, 2023

WALE, or Weighted Average Lease Expiry, is a metric used in commercial real estate to measure the average length of leases for a property or portfolio of properties. It is a crucial metric for investors and property owners to understand, as it provides insight into the stability and cash flow of their investments.

In simple terms, WALE is calculated by taking the total length of all leases in a property or portfolio and dividing it by the number of leases. The result is the average length of time that a tenant is committed to a lease in a property. The weighting component of the calculation takes into account the relative size of each lease, so a large lease has a greater impact on the overall WALE than a smaller one.

A high WALE indicates that a property has a stable income stream, as tenants are committed to long-term leases. This stability can make the property more attractive to investors, as it reduces the risk of vacancies and loss of income. On the other hand, a low WALE suggests that the property is more vulnerable to market fluctuations and changes in tenant demand, as leases are shorter and more likely to expire in the near future.

WALE is also useful for property owners and managers, as it provides insight into the future lease expiry schedule. This information can help inform decisions around lease renewals, property renovations, and marketing efforts to attract new tenants.

It is important to note that WALE is just one of many metrics used to evaluate commercial properties. Other metrics, such as occupancy rate, rental yield, and capitalisation rate, can provide complementary information and help provide a more complete picture of a property's performance.

In conclusion, WALE is a valuable metric for commercial property investors, owners, and managers. By providing insight into the average length of leases in a property or portfolio, it helps inform decisions around stability, cash flow, and future leasing activity.


Let's say a commercial property has four leases, with the following terms:

Tenant 1 has a lease for 5 years

Tenant 2 has a lease for 2 years

Tenant 3 has a lease for 4 years

Tenant 4 has a lease for 3 years

To calculate the WALE for this property, we would first add up the total length of all leases: 5 years + 2 years + 4 years + 3 years = 14 years.

Next, we would divide the total lease length by the number of leases (4): 14 years ÷ 4 = 3.5 years.

So, the WALE for this property is 3.5 years. This means that, on average, tenants are committed to leases for 3.5 years. This can give investors, property owners, and managers an idea of the stability of the property's cash flow, as well as the frequency of lease expiries and potential tenant turnover.

It's important to note that this is a simplified example and that the calculation of WALE can become more complex in real-world scenarios, especially for larger portfolios with many leases of varying sizes and terms.


Lease Length (years)

Tenant 1


Tenant 2


Tenant 3


Tenant 4





14 / 4 = 3.5

Now that you have a better understanding of WALE and its importance in commercial real estate, why not take the next step and find out more? Consider reaching out to the Jay Anderson Property team to gain a deeper knowledge of this crucial metric and how it can impact your investments. Contact Us


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