Glossary
Weighted average lease expiry (WALE)
Also called: WALE
WALE is the average remaining lease term across a property's tenants, weighted by the rent or area each tenant occupies. It indicates how secure a commercial property's income is over time.
An example
A retail centre has a major tenant on a long lease and several small shops on short leases. Weighting each lease by its rent produces a WALE that is longer than the simple average, because the large tenant pays most of the rent.
Why it matters
A short WALE means income could fall soon if tenants leave, which affects valuation and how much a lender will advance. Lenders often look closely at leases expiring during the loan term.
Points to check
Ask how the WALE has been calculated, whether by income or area, and whether it includes options to renew. Check the lease terms of the largest tenants, because a single major lease expiry can change the picture. Lenders may shorten the loan term or reduce the loan amount where WALE is short. Test how a vacancy would affect income and interest cover.
Read about commercial property loans