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renewal probability

    0.01 sec.
renewal probability

The average percentage of tenants in a building that are expected to renew at market rental rates at the expiration of their current leases. The figure is used to estimate leasing-related costs and downtime.



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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.
00 per-square-foot, per-year market rent, with annual Consumer Price Index (CPI) escalations * 10-year market lease terms * 12-month downtime * 50% renewal probability * 5% per-year rent and expense growth * 12% annual discount rate * 9% reversionary capitalization rate * 3% selling costs For analysis purposes, the impact of loans and debt reduction has not been considered.
 
 
 
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