This refers to a tool, often digital, designed to estimate the financial implications of prolonging a lease agreement beyond its original term. The calculation considers factors such as the current rent, anticipated market values, negotiation strategies, and any associated fees or costs. For example, a business considering renewing its office space lease can employ this tool to assess whether the extended rental cost is justified compared to relocating or negotiating a new agreement.
Its significance lies in providing lessees with a clearer understanding of the financial commitment involved in continuing a lease. Benefits include enabling informed decision-making, supporting negotiation with lessors, and facilitating budgetary planning. The use of such tools has evolved alongside the increasing complexity of lease agreements and the need for precise financial forecasting in property management.