Also expressed as average space downtime, downtime is the general term used to describe the typical amount of time expected between the expiration of a lease and the commencement of a replacement lease for a particular property. Downtime pertaining to real estate is usually expressed in weeks or months.
Downtime shouldn’t be confused with vacancy. Vacancy often means a space is vacant of tenants, and the landlord is actively looking for new tenants. Downtime can mean a tenant is available and the space is being prepared.
When one tenant vacates a space, it usually needs some maintenance to get it move-in-ready. This type of downtime can mean preparation for any general tenant. There may or may not be a tenant actively waiting to move in. Either way, no tenant can move in until the space is ready.
Some tenants may request specific features for a space. Depending on the tenant’s needs, these updates can take longer than average. While the landlord can’t charge the tenant for occupancy, depending on the extent of tenant-specific updates, the landlord may charge a fixed fee, payable before the lease starts. The fee also may be amortized across the lease.
In addition to regular preparations for a new tenant, spaces periodically require an overhaul. Such changes are usually due to changing tenant needs. For example, hard-wired network jacks might be replaced with more wireless network repeaters. Network bandwidth for common areas may need to be increased.
Common areas also require periodic upgrades. A gym or kitchen may need to be added, for example. However, upgrading common areas is different from upgrading a tenant space. While part of a common area may not be available during upgrades, it usually will not prevent tenants from using their leased space. Regarding adding more tenants, work on common areas will often not prevent spaces from being leased.