Tenant Riskiness, Contract Length, and the Term Structure of Commercial Leases

• 成果类型: Article; Early Access
• 署名作者: Brueckner, Jan K.; Rosenthal, Stuart S.
• 署名单位: University of California System; University of California Irvine; Cornell University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2024.04959
• 发表日期: 2025
• 关键词: commercial real estate; lease length; tenant risk; finance; industries; Real estate

摘要

This paper explores the connection between tenant riskiness, commercial lease length, and the term structure of lease contracts. Theory shows that the possibility of default on a long-term lease generates a risk/lease-length connection. The empirical work uses a large CompStak lease data set combined with tenant characteristics (including risk) from Dun & Bradstreet (D&B). Regressions show that lease length is inversely related to the D&B risk measures, as predicted, and that risky tenants pay a higher rent premium for long-term contracts than low-risk tenants. The presence of such tenants thus raises the slope of the term structure of commercial rents.