Tenant Riskiness, Contract Length, and the Term Structure of Commercial Leases: Insights from Jan K. Brueckner and Stuart S. Rosenthal Using CompStak Data

At CompStak, we’re proud to support academic research that drives deeper understanding in commercial real estate.

“Tenant Riskiness, Contract Length, and the Term Structure of Commercial Leases” by Jan K. Brueckner and Stuart S. Rosenthal delves into how tenant riskiness and lease contract length impact lease agreements and the broader commercial real estate market.

The full abstract of the paper can be found below, offering a glimpse into the depth of research that leverages the precision and accuracy of CompStak data to assess market changes.

“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 dataset combined with tenant characteristics (including risk) from Dun & Bradstreet. 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.”

Download the full paper here.