Which leasing strategy generates more value across its full economic life?
Spec suites lease faster and command a premium. Traditional leases compound over longer terms. Flex and managed office introduce a different economics entirely. Each strategy has a different economic life and that's exactly where standard comparisons break down. We model every cash flow across every cycle so the answer is defensible, not debatable.
Who this is for
For owners deciding how to deploy capital and advisors helping them get there
The leasing strategy question surfaces at every vacancy event. To answer it properly, the financial comparison has to be settled before the strategic conversation can start.
Owners and asset managers
- Office Landlords facing a vacant floor who need to decide whether to invest in spec suites, wait for a tenant-driven buildout, or explore flex and managed office. Get a number that holds up in a board meeting.
- Asset Managers evaluating whether a leasing strategy shift is justified given current CapEx budgets and hold period assumptions.
- Acquisition Teams underwriting an office asset where the incumbent leasing strategy needs to be stress-tested or replaced.
Advisors and brokers
- Leasing Brokers who want to present a strategy recommendation grounded in financial modeling, not just market intuition.
- Property Advisors helping clients evaluate a repositioning strategy where the leasing approach is a central variable.
- Any situation where the recommendation needs to go into the room with a clear financial rationale instead of a gut feeling.
Why standard comparisons fail
Each leasing strategy has a different economic life. Standard metrics don't account for that.
The economic life of a leasing strategy spans from the initial capital investment to the point where the next decision needs to be made. For a spec suite, that might cover two or three tenancies, the vacancies between them, and a full refresh at the end. For a traditional lease, it may simply run the length of the term. For flex and managed office, the structure is different again.
These economic lives are rarely the same length. That's where standard tools break down. Net Present Value (NPV) rewards duration, not performance. Net Operating Income (NOI) ignores the capital required to generate returns. Net Effective Rent (NER) sidesteps the period problem by ignoring the cost of capital entirely. Each gives you a wrong answer, just for different reasons.
The fix is a metric that normalizes across different economic lives: Equivalent Monthly Annuity (EMA). It converts every cash flow across every cycle, regardless of how long each one runs, into a single comparable monthly figure. One number per strategy, directly comparable.
Misleading comparison metrics
A 10-year traditional lease generates more cash flows than a 7-year spec suite cycle almost regardless of which produces better returns per dollar invested. NPV rewards duration, not performance.
The spec suite buildout sits below the NOI line. Strip it out and returns look stronger than they are. NOI ignores the capital required to generate those returns.
NER averages incentives across the lease term without accounting for the cost of capital or what happens after the lease ends. It was designed to compare incentive structures within a single lease, not strategies with different economic lives. NER produces a number that feels precise but answers a different question entirely.
How we help
A leasing strategy is a capital deployment decision. We treat it that way.
We model every cash flow for every strategy across its full economic life and convert the whole thing into a single comparable monthly figure using EMA. One number per option, directly comparable regardless of how many cycles each one runs or how the capital is structured.
The result is a comparison you can walk into any room with. Strategy A generates $X per month on average over its economic life. Strategy B generates $Y more. Here is exactly what is driving the difference. Now the conversation can be about strategy: does this match the business plan and what happens at exit rather than relitigating the financial baseline.
How it works
Three steps. No long engagements.
Start with a free conversation to scope the work. If it makes sense, we build the analysis and hand it back to you in ReturnSuite, ready to present, and yours to update as conditions evolve.
Free scoping call
We spend 45 minutes understanding your situation, the property, the market, the strategies you're weighing, and where you are in the decision. We'll confirm whether a full analysis is warranted and, if it is, agree on scope and timeline before any work begins.
45 minutes · FreeWe build the financial model
Send us what you have, i.e. market comps, broker proposals, your buildout cost estimates, current vacancy assumptions. No required format. We model every strategy across its full economic life: rent, free rent, CapEx, commissions, vacancy periods, GLA adjustments, refresh costs. Each one converted into a single comparable monthly figure using Equivalent Monthly Annuity.
If anything is ambiguous or missing, we'll reach out directly rather than make assumptions that distort the comparison.
~2 business daysYou get a live model, not just a report
The deliverable is a working model in ReturnSuite, not a static PDF. It's presentation-ready from day one and clear enough for a board discussion, detailed enough for your finance team to interrogate. As market conditions change or assumptions shift, you can update inputs and re-run the comparison yourself, or reach out, and we'll make the adjustments.
Presentation-ready · Yours to keepReady to find out?
Start with a 45-minute conversation.
We'll look at your acquisition process and give you an honest answer about whether your portfolio data is strong enough to generate a real edge. No cost, no commitment.