Retail · Rollover
Reading a Rollover Schedule: WALT, Concentration and the Year That Hurts
Two centers with identical rent rolls can carry completely different risk. The expiry schedule is where you find it.
A rent roll tells you what a property earns today. The rollover schedule tells you how likely it is to keep earning it. On multi-tenant retail, the second document matters more than the first, and it is the one most often skimmed.
Weighted average lease term
WALT is the rent-weighted average of the years remaining across the rent roll. Rent-weighted matters: a 9,000 square foot anchor with seven years left should count for more than a 1,200 square foot salon with two. Lenders size against WALT, buyers price against it, and it is the single best shorthand for how much rollover risk you are buying.
Concentration
Ask what share of income comes from the largest tenant. Below thirty percent is comfortable. Above forty and you effectively own a single-tenant deal wearing a strip center's clothes, if that lease rolls badly the whole property reprices, and the diversification you thought you were buying was never there.
The stacking problem
This is the one that gets missed. Look at rent expiring by year, not just square footage, and look at it cumulatively. Five leases expiring in the same year is a capital event: allowances, commissions and downtime all landing together, funded from somewhere. Two properties can share the same WALT while one has smooth annual expiries and the other has a cliff in year four.
Model that year properly and it often shows a negative cash flow, one year where the tenant improvement checks and a roof replacement land on top of debt service. That is not a reason to walk. It is a reason to know it is coming and to have the money.
What good looks like
Staggered expiries, no single year above roughly twenty percent of income, largest tenant under thirty percent, and a WALT that comfortably exceeds your hold period. When your hold ends the same year your anchor expires, you are selling a re-tenanting problem rather than an income stream, and a buyer will price it that way.
Build the schedule: Strip Plaza underwriting reports WALT, concentration, and square feet and rent expiring in every year of your hold.
Related notes
How to read this. These are working notes. Figures come from public reporting and from the models on this site, and market conditions change, check anything time-sensitive against the source before you rely on it. Nothing here is investment, tax or legal advice, and no note is a substitute for diligence on a specific property.
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