As of 2016 Q3, more than a third of U.S. leases tracked by MSCI were set to expire in less than 40 months. Nearly 60% of the underlying contracted rents in these leases were tied to office assets, two-thirds of which were located in CBDs. Timing matters for these expiring leases, especially for contracts ending in the next two to three years, a period when U.S. domestic and foreign policy priorities could experience transition. For institutional investors, uncertainty — whether upside or downside — requires careful management of risks to the income stream. The analysis of the CBD office sector in these pages covers the four primary dimensions of risk in IRIS (MSCI's property income risk and performance service): concentration, lease length, market conditions, and tenant credit.
Source : MSCI