A building’s income is only as steady as its lease dates. Six leases that end across six years are six manageable decisions. Six that end in the same year are one large risk with six parts.
Owners rarely choose that bunching on purpose. It happens because a building was leased up in one push, or because every tenant was offered the same five-year term. Years later, the dates arrive together.
This article shows how to measure rollover risk on your own building, what a single turnover can cost, and the practical ways to spread the dates out.
What rollover risk means
Rollover risk is the chance that leases ending close together leave you with empty space, lower rent and re-leasing costs all at once. The risk is not that leases end. Every lease ends. The risk is that too much of your income is up for renewal in the same twelve months.
Measure it by share of rent, not share of square feet. A small space at a high rent can matter more than a large space at a low one. The question is simple: in each future year, what percentage of this building’s rent could walk out the door?
Build a rollover schedule
You need one line per lease, taken from the leases themselves rather than from memory or the rent roll alone.
- List each tenant, its square feet and its current annual rent.
- Write the expiration date as the lease and its amendments set it.
- Note any renewal option, and the date by which the tenant must give notice.
- Note any early termination right, which can move the real end date earlier.
- Add up the rent ending in each calendar year and divide by total rent.
Step 3 and step 4 are where most schedules go wrong. An amendment from six years ago may have changed a date, and a termination right buried in a rider is easy to miss. A lease abstract puts each of those dates on two pages, with the section it came from.
A center with bunched dates
Take a hypothetical 16,500 square foot retail center in Rock Springs with six tenants. The rents and dates are illustrative.
| Tenant | Square feet | Annual rent | Lease ends |
|---|---|---|---|
| A | 4,000 | $60,000 | 2027 |
| B | 3,000 | $48,000 | 2027 |
| C | 2,500 | $40,000 | 2027 |
| D | 2,500 | $37,500 | 2029 |
| E | 2,500 | $35,000 | 2030 |
| F | 2,000 | $29,500 | 2031 |
| Total | 16,500 | $250,000 |
Rent ending in 2027 is $60,000 + $48,000 + $40,000 = $148,000. Divided by $250,000, that is 59.2% of the building’s rent in one year. Nothing ends in 2028. Then 15.0%, 14.0% and 11.8% roll in 2029, 2030 and 2031.
On paper this building is fully leased. In practice, more than half of its income is a coin toss in 2027.
What one turnover costs
To see why bunching matters, price a single tenant leaving. Take tenant B: 3,000 square feet at $16 per square foot, or $48,000 a year. The assumptions below are illustrative; use your own broker’s and contractor’s numbers.
| Cost of re-leasing B’s space | Math | Amount |
|---|---|---|
| Six months vacant | $48,000 × 0.5 | $24,000 |
| Expenses the tenant no longer reimburses | 3,000 sq ft × $4.00 × 0.5 | $6,000 |
| Improvements for a new tenant | 3,000 sq ft × $12 | $36,000 |
| Leasing commission (assumed) | broker’s quote | $12,000 |
| Two months of free rent | $4,000 × 2 | $8,000 |
| Total | $86,000 |
That is $86,000 ÷ $48,000 = 1.8 years of B’s rent to replace one tenant. Now suppose B renews instead, with $3 per square foot of improvements ($9,000) and one month free ($4,000). The renewal costs $13,000, or $73,000 less than re-leasing in this example.
If A, B and C all left in 2027, the same assumptions scale to roughly $269,000. That is more than a full year of the whole building’s rent, landing in a single year.
How to stagger the dates
You cannot set a tenant’s plans, but you can shape when the conversation happens and what term it ends with. A few practical moves:
- Renew early, with different terms. Offer one tenant five years, another six, another a one-year extension, so their new dates fall in different years.
- Lease vacant space to an empty year. When filling a vacancy, choose a term that ends in a year with little else rolling.
- Avoid matching option dates. If every tenant has the same option window, the bunching simply moves to the option year.
- Watch termination rights. A right to leave early is a second expiration date. Count it on the schedule.
- Check co-tenancy clauses. Some retail leases tie one tenant’s rent or right to stay to another tenant being open.
Back to the example. Suppose A renews for five years to 2032, B for six years to 2033, and C takes a one-year extension to 2028. The schedule becomes 16.0% in 2028, 15.0% in 2029, 14.0% in 2030, 11.8% in 2031, 24.0% in 2032 and 19.2% in 2033. The worst single year falls from 59.2% to 24.0%.
Whether tenants agree is a negotiation, and longer terms usually cost something: a rent concession, an improvement allowance, or both. Price that cost against the turnover math above before you offer it.
Set leases beside the loan
Rollover risk and debt risk compound. A lender looking at a refinance will read the lease schedule, and 59% of rent ending a few months after closing reads very differently from 24%.
If a loan on the building matures within two years, put the maturity date on the same page as the rollover schedule. Signing key renewals before you apply puts a steadier schedule in front of the underwriter.
When one tenant is everything
A single-tenant building has the most extreme schedule of all: 100% of rent ends on one date. You cannot stagger one lease, so the work changes shape.
- Know the notice date. If the tenant holds a renewal option, the real decision date is the notice deadline, often months before expiration.
- Ask early. A conversation 18 months out tells you whether to plan for a renewal or a vacancy.
- Price the empty building. Know what the property is worth vacant, because that is the value a lender or buyer sees as the date nears.
- Hold a reserve. Six months of carrying costs set aside turns a vacancy from a crisis into a project.
For an owner with several single-tenant buildings, the staggering happens across the portfolio instead: aim for expirations in different years, building by building.
Price the whole renewal
A renewal offer is a stream of payments over years, not a single rent figure. A lower starting rent with fixed annual increases can end up worth more over the term than a higher flat rent, or less, depending on the steps.
Our lease cost calculator adds up rent across a term with escalations, so you can compare a renewal offer against the cost of a turnover on the same basis. Put the free rent and improvement allowance in the comparison too.
A rollover checklist
Run through this once a year for every multi-tenant building:
- Rent ending in each of the next five years, as a share of total rent
- Any year above roughly a quarter of rent (a prompt we use for attention, not an industry rule)
- The share of rent paid by your largest tenant
- Every renewal option notice date on the calendar, with a reminder 60 days ahead
- Every early termination right, counted as a possible end date
- The cost of losing your largest tenant, priced with your own assumptions
- Loan maturity dates set beside the lease dates
- Renewal talks opened 12 to 18 months before each expiration, as we suggest
Where Clover State helps
The portfolio health check scores lease roll for up to five properties, alongside value range, debt maturity and tax dates, from $2,500 in 15 business days. It flags the years where rent bunches and the buildings where it matters most. It is part of our portfolio management work, which is advisory: we do not negotiate with your tenants or act as a broker.
If the dates themselves are in doubt, start with a lease abstract for each tenant: from $275 per lease, three business days for up to five leases. Every date is cited to the page it came from, so the schedule rests on the lease, not on a rent roll someone typed years ago.
Spread the dates while you can
The best time to stagger leases is two or three years before they bunch, while every tenant still has a reason to talk. Book a free 30-minute scoping call and we will tell you whether a portfolio health check or a set of lease abstracts fits your building, what it costs and when you would have the schedule in hand.
