Industrial or commercial tenancies incur costs to the tenant which are both directly and inversely related to the length of the tenancy. From optimisation theory, the result of this is that there is a unique optimum tenancy length for each tenant at each location, and tenants will be willing to...

This paper analyzes the rental term structure taking into account the opportunity costs faced by the tenant for varying lease lengths. The analysis involves the application of a multi-period stock inventory model. The implication of the model is that the term structure of rents is determined by...