What characteristic does effective rent provide in lease analysis?

Effective rent is an important concept in lease analysis as it takes into account various lease concessions that landlords may offer to tenants. These concessions can include incentives such as free rent, reduced rates, or tenant improvements. By adjusting the nominal rent to factor in these concessions, effective rent provides a more accurate representation of the actual value and economic conditions of the lease agreement for both parties involved.

This adjustment reflects the real cost to the tenant over the duration of the lease and helps landlords understand the true income they can expect from the property. Thus, effective rent serves as a critical tool in evaluating the financial aspects of leasing agreements, making it easier to compare different lease offers and analyze market trends.