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Anchor Replacement Rent Gap Calculator

Legacy anchor rent rarely matches replacement.

SF
$
$
$
%

Net value impact

-$3,326,667

Rent gap value loss

$1,600,000

TI + downtime cost

$1,726,667

How the math works

Gap = legacy − replacement. Rent gap value = gap × SF / cap. TI + downtime add to loss. Sum negative for total impact.

40k SF × $3 gap = $120k/yr. At 7.5% = $1.6M rent gap value. $1.4M TI + $327k downtime = $1.73M. Total −$3.3M value impact.

How to Use

  1. Enter anchor SF.
  2. Enter legacy anchor rent PSF.
  3. Enter market replacement rent PSF.
  4. Enter replacement TI PSF.
  5. Enter downtime months.
  6. Enter cap rate %.
  7. Read net value impact.

Frequently Asked Questions

Why is there a gap?

Legacy anchor leases (often 25-30 years old) were signed at below-market rates with escalators. Market rate for new anchor is usually 40-80% of the legacy rate because big-box fundamentals have weakened. Gap = structural loss.

Replacement strategies?

Like-for-like replacement: hardest; anchor space is commoditized. Split/subdivide: 2-4 smaller tenants at higher aggregate PSF. Non-traditional: fitness, medical, experiential. Redevelopment: demolish for mixed-use. Each carries different cost and value.

Value impact?

Rent gap × SF / cap rate = headline loss. Plus TI to re-tenant, downtime rent loss, cotenancy trigger damage. A $4/SF gap on 40,000 SF at 7% cap = $2.3M value loss plus $1-2M re-tenanting cost = $3-4M total — often 20%+ of center value.

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