What is WALT in commercial real estate?

WALT (Weighted Average Lease Term) is the average remaining lease term across a property weighted by rent. WALT = Σ(Annual Rent × Years Remaining) ÷ Total Annual Rent. A higher WALT signals lower near-term rollover risk; investors price WALT premiums for stabilized assets and discount for upcoming heavy rollover.

How do CAM reconciliations work?

CAM (Common Area Maintenance) reconciliation compares actual landlord-incurred operating expenses against tenant pass-through estimates billed during the year. At year-end the landlord trues up: tenants over-billed get credits, under-billed get true-up invoices. Disputed CAM categories (capital vs operating, exclusions, audit rights) are the most-litigated lease provisions in commercial real estate.

What is the difference between NNN, modified gross, and full-service lease?

NNN (triple-net): tenant pays base rent plus property taxes, insurance, and CAM separately — landlord receives "net" rent. Modified Gross: tenant pays base rent plus utilities and an annual increase in operating expenses ("base year stop"). Full-Service Gross: landlord covers all operating expenses, tenant pays single all-in rent. NNN is dominant in retail/industrial; modified gross/full-service is common in office.

How does Ilora.ai help with office lease audits?

Ilora.ai's Lease Abstraction agent ingests lease documents (PDFs or scans), extracts every clause (rent, escalations, options, CAM exclusions, audit rights), and normalizes them across the portfolio. Forensic Accountant agent then audits CAM reconciliation worksheets against the leases to flag mis-billed exclusions, capital-as-operating-expense issues, and miscalculated pro-rata shares.

Office KPIs.

Office buildings — Class A, B, or C — are leased to corporate tenants typically on net or modified-gross structures. Performance is measured in WALT (weighted average lease term), occupancy, rent psf, CAM-recovery accuracy, and rollover risk. Post-2020 the sector has bifurcated: trophy A-grade in tier-1 metros remains strong; commodity B/C office faces secular demand pressure. Comparable REITs (BXP, KRC, VNO, DEI, CUZ, HIW) report extensively on lease economics. Major tenant categories: TAMI, financial services, professional services, government. Ilora.ai ingests rent rolls, lease abstracts, CAM reconciliation worksheets, T-12 P&Ls, and stacking plans, then models WALT + rollover impact + CAM-recovery accuracy against BXP, KRC, VNO, DEI, CUZ, HIW comparables. BOMA, CoreNet Global, IREM, NAIOP, and ULI Office Council are the canonical industry organizations. Lease abstraction agents flag every CAM exclusion, audit-rights clause, and tenant-improvement amortization schedule.

15 definitions · Sector: COMMERCIAL · Used by Ilora.ai specialist AI agents

NOI: Total revenue minus operating expenses (excludes financing and capital costs). The primary measure of property-level profitability.
Cap Rate: Net Operating Income divided by current property value. Expresses unleveraged annual yield as a percentage.
DSCR: Net Operating Income divided by total annual debt service. Lender-required cushion measure; below 1.0 means NOI cannot cover debt.
LTV: Loan amount divided by property value. Lower LTV = lower lender risk.
OER: Operating expenses divided by gross revenue. Lower is better, but varies by property type (hotels run higher than triple-net retail).
GRM: Property value divided by gross annual rental income. Quick valuation shortcut; less precise than cap rate.
IRR: Annualized return on investment accounting for time value of money across the full hold period.
CoC: Pre-tax annual cash flow divided by total cash invested. Measures the cash yield, not total return.
DCF: Valuation method that projects future cash flows and discounts them to present value at a chosen rate.
TTM: A rolling sum of the most recent 12 months. Smooths seasonality for KPI comparisons.
WALT: Average remaining lease term weighted by rent. Higher WALT = lower rollover risk.
NNN: Triple-net lease — tenant pays base rent plus property taxes, insurance, and maintenance separately.
CAM: Tenant-recoverable expenses for shared building/center upkeep. Often disputed in audits.
TI: Cash allowance from landlord to tenant for build-out. Amortized over lease term.
RSF: Tenant's usable square footage plus a pro-rata share of common areas. The basis for rent calculation.

Sub-types

Sub-types within Office.

Class A Trophy: Premier buildings in CBD, recent vintage, full amenity.
Class A Suburban: High-quality suburban product, tenant-centric amenities.
Class B: Older urban or commodity suburban product, value-engineered.
Class C: Older buildings, limited amenities, value-add or repositioning candidates.
Creative Office / Adaptive Reuse: Loft / warehouse conversion, often serving TAMI tenants.

Amenities & features

8 amenities Ilora.ai tracks for Office.

On-Site F&B / Cafeteria: Tenant-accessible food service. Increasingly expected in trophy office.
F&B revenue per RSF
Conferencing Center: Building-shared meeting + event space. Common-area amenity.
Conferencing booking %
Fitness Center: Building gym, 24-hour access. Standard tenant amenity.
Fitness membership rate
Tenant Lounge: Common-area workspace + coffee bar.
Lounge utilization
Bike Storage + Showers: Wellness/commute amenity for bike commuters.
Bike storage utilization
Concierge Services: Building concierge for tenant requests, dry-cleaning, packages.
Concierge ticket volume
Parking (Garage/Surface): Tenant + visitor parking. Often owned separately or sub-leased.
Parking revenue per RSF
Tenant parking ratio
EV Charging: Building EV charging infrastructure. Increasingly required.
EV station utilization

Industry reference

How the office sector operates.

Market segments

Financial services
Technology / TAMI
Professional services (legal, accounting)
Government / GSA
Healthcare admin
Coworking operator subleases

Operating models

Owner-operated
Third-party leasing + property management
REIT-owned + managed
Net-leased (single tenant)

Regulatory frameworks

BOMA (Building Owners and Managers Association) measurement standards
Local energy benchmarking (NYC LL84/LL97, CA AB 802)
ADA Title III
Local building codes + life safety

Industry organizations

BOMA
CoreNet Global
IREM
NAIOP
CCIM Institute
ULI Office Council

Comparable public REITs / operators

BXP (Boston Properties)
KRC (Kilroy Realty)
VNO (Vornado Realty Trust)
DEI (Douglas Emmett)
CUZ (Cousins Properties)
HIW (Highwoods Properties)
PDM (Piedmont Office Realty)
OPI (Office Properties Income Trust)
JBGS (JBG Smith)

Documents Ilora.ai ingests

Rent roll
T-12 P&L
Tenant lease abstracts
Lease expiration schedule (rollover)
CAM reconciliation worksheet
Tenant improvement amortization schedule
Stacking plan
Building service contracts
Capital plan
Property tax bills + appeals

Industry tools (we integrate with these)

Yardi Commercial
MRI Commercial Management
Argus Enterprise
Argus DCF
CoStar
VTS (leasing CRM)
Honest Buildings (capital project mgmt)
Building Engines
Riskonnect (insurance)
Powerhouse Dynamics (energy)

Frequently asked

Common questions about office.

What is WALT in commercial real estate?: WALT (Weighted Average Lease Term) is the average remaining lease term across a property weighted by rent. WALT = Σ(Annual Rent × Years Remaining) ÷ Total Annual Rent. A higher WALT signals lower near-term rollover risk; investors price WALT premiums for stabilized assets and discount for upcoming heavy rollover.
How do CAM reconciliations work?: CAM (Common Area Maintenance) reconciliation compares actual landlord-incurred operating expenses against tenant pass-through estimates billed during the year. At year-end the landlord trues up: tenants over-billed get credits, under-billed get true-up invoices. Disputed CAM categories (capital vs operating, exclusions, audit rights) are the most-litigated lease provisions in commercial real estate.
What is the difference between NNN, modified gross, and full-service lease?: NNN (triple-net): tenant pays base rent plus property taxes, insurance, and CAM separately — landlord receives "net" rent. Modified Gross: tenant pays base rent plus utilities and an annual increase in operating expenses ("base year stop"). Full-Service Gross: landlord covers all operating expenses, tenant pays single all-in rent. NNN is dominant in retail/industrial; modified gross/full-service is common in office.
How does Ilora.ai help with office lease audits?: Ilora.ai's Lease Abstraction agent ingests lease documents (PDFs or scans), extracts every clause (rent, escalations, options, CAM exclusions, audit rights), and normalizes them across the portfolio. Forensic Accountant agent then audits CAM reconciliation worksheets against the leases to flag mis-billed exclusions, capital-as-operating-expense issues, and miscalculated pro-rata shares.

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