As of Q2 2016, nearly half of U.S. commercial leases tracked by MSCI were set to expire within five years. The underlying contracts were concentrated heavily by property type (nearly 60% were tied to office assets) and geographically (more than half the value was weighted to California and the Northeast corridor from Boston to Washington, DC). The timing of expiration schedules and the level of open market rents matter, especially in these areas of concentrated investments. In this report, we examine the structure of U.S. retail leases, which account for one-fifth of institutional investment in U.S. real estate. The analysis covers the four primary dimensions of income risk ‒ concentration, lease length, market conditions, and tenant credit ‒ as captured by IRIS, MSCI's flagship product for property income risk.
Source : MSCI