Jimmy Goodman, Partner of The Boulder Group, added, “Short term single tenant properties leased to CVS are in high demand due to the high renewal probability
and the attractive yield.
While there is a general agreement among those surveyed that the renewal options and contingent rents should be included in the measurement, there are concerns about the subjectivity surrounding the estimation of renewal probability
, renewal rent and contingent rent, as well as the administrative burden of the required reassessment of those estimates every reporting period.
For example, the "effective vacancy rate" is the annual vacancy rate that is equivalent to the original assumptions regarding the renewal probability
and months vacant (if not renewed) assumptions regarding existing leases.
Jimmy Goodman, Partner of The Boulder Group, added, “Newly constructed GSA assets are in high demand as they have a historic renewal probability
of over 90%.