How do you manage an industrial portfolio's lease-expiry wall?
You manage a lease expiry wall by measuring it early, spreading it with renewals and regears on staggered terms, ranking the expiring leases by income at stake and how hard each unit would be to re-let, and starting replacement searches on the likely leavers before their notice dates. Scayled runs those replacement searches. For each expiring unit it finds 250 to 350 businesses the building suits, the person who signs at each, and drafts an approach per business, without advertising the space, as a Full Campaign for US$749 per unit.
- What is a lease expiry wall?
- How do you find and measure an expiry wall?
- How do you spread an expiry wall?
- How do you prioritise the expiring leases?
- How do you line up replacement demand ahead of the wall?
- What does Scayled cost?
What is a lease expiry wall?
A lease expiry wall is a year, or a short run of years, in which a large share of a portfolio's income expires or can be broken. It often comes from leases signed at the same time: a portfolio acquired or developed in one go, or a wave of lettings in a strong market.
It is a distinct risk because the expiries compete with each other. Several large units coming back in the same submarket at once chase the same occupiers, which can lengthen downtime and weaken rents for all of them.
How do you find and measure an expiry wall?
Chart income expiring by year, to expiry and to first break, from the lease system or ARGUS. Then break it down by submarket, by asset size and by tenant industry. A wall concentrated in one submarket or one size band is more dangerous than the same income spread across markets.
Do this several years ahead. The tools that spread a wall, early renewals and regears, need time to work.
How do you spread an expiry wall?
Offer early renewals or regears to tenants likely to stay, on terms that end in different years. Trade incentives for longer terms or for removing breaks. Where a tenant is growing, offer a larger unit elsewhere in the portfolio on a new lease. Where an asset is exposed and not core, consider selling it before the wall.
Accept that not every expiry can be moved. The aim is to reduce how much expires together, then prepare properly for the leases that will still end.
How do you prioritise the expiring leases?
Rank them by income at stake, the likelihood the tenant leaves, and how hard the unit would be to re-let. A large specialised unit with an uncertain tenant goes to the top; a small standard unit in a dense market can wait.
Base the likelihood on evidence: lease terms, payment history, credit alerts, news about the business, and what the tenant has said about its plans. Record the evidence so the ranking can be explained to the investment committee and lenders.
How do you line up replacement demand ahead of the wall?
For each likely leaver, start a replacement search before the notice date, so conversations are under way by the handback. Run it quietly, so the sitting tenant and the market are not alerted by a listing.
Scayled builds those searches, one per expiring unit. Each returns 250 to 350 businesses the property suits, near and across the market, with the person who signs at each, a checked contact and a personal email. The brief lists who to leave out, starting with the sitting tenant, and across a wall the lists show how deep demand is for each unit.
What does Scayled cost?
Across a wall, the cost scales with the units you choose to work: each is a separate campaign, paid once, at US$749 for the Full version or from US$449 for Focused. There is no subscription and no commission on the letting, and Scayled can send in the fund's name from a mailbox on its company email for US$299 more.
Every business, contact and email stays in the fund's Scayled account, so the next expiry in the same area starts from businesses the team already knows. Replacement tenant software covers the same search for a single unit.
Lease The Vacancy In-House, Before You Appoint An Agent.
The Campaign finds the 250 to 350 businesses the building suits, names the person who decides at each and writes every email, ready in about five days. One payment of US$749 per property, no commission and no subscription. A focused 100 to 150 from US$449.