Operators moving into industrial or office from other asset classes meet WALT quickly, because it is the first number an institutional buyer or lender asks for, and the way it is computed carries a lesson worth internalizing rather than memorizing. Weighted average lease term is not the average of the years remaining on the leases. It is that average weighted by each lease's share of the rent, and the difference between those two calculations is the entire point of the metric.
See it in one contrast. A five-tenant building where the largest tenant by rent has two years left and four small tenants have eight reads very differently from the same building with the terms reversed, and a simple average of years cannot tell the two apart. Rent-weighting can, because it answers the question the money actually cares about: not how long the leases run on average, but how long the income is contracted to exist. WALT is a durability statement about dollars, not doors, which is why the institutional convention weights by rent and why any number presented as WALT deserves the follow-up question of how it was computed.
What the number does downstream is where it earns attention. Lenders read WALT against their loan term, and a rent roll whose weighted term expires inside the debt is a rent roll the lender will size against their exposure, not your pro forma. Buyers read it as a discount or premium input: long WALT with credit tenants prices like a bond, short WALT prices like a project, and the same NOI trades at meaningfully different numbers depending on which one it resembles. And sellers manage toward it, which is worth knowing on both sides of the table, since a flurry of early renewals in the year before a listing is frequently WALT dressing for the sale.
The metric has honest limits, and using it well means knowing them. WALT is a snapshot that says nothing about what happens at the expirations it counts down to: a building full of below-market leases has a short-WALT problem and a mark-to-market opportunity wearing the same number. It also flattens credit, treating a strong tenant's years and a struggling tenant's years identically. WALT starts the income durability conversation. It was never supposed to finish it.
The widget below computes both versions, simple average and rent-weighted, from a rent roll you enter, and the gap between the two numbers is itself diagnostic: a wide gap means the term is concentrated somewhere, and you should know where. PropCalc™ computes rent-weighted WALT live as the rent roll changes, alongside the per-tenant rollover assumptions that answer the question WALT only raises. What happens when the term runs out is the underwriting. WALT just tells you how long you have to get it right.