Lease-Up

Lease-up is the stretch between a property being ready for occupancy and being stabilized: the building is done (or renovated), the marketing is live, and occupancy is climbing month by month toward the market norm. For a new apartment building that might be 12–18 months; for an office or industrial property it can hinge on a handful of large leases.

Lease-up is when borrowers are most exposed. Construction or bridge debt is still accruing — usually interest-only at a floating rate — while income is only partially in place, so every month of slower absorption burns the interest reserve. Lenders watch lease-up velocity closely, and loan documents often tie extension options or guaranty burn-offs to hitting occupancy and DSCR milestones by set dates.

In our data, lease-up risk appears at the intersection of modules: county records show the deed of trust that funded the project, Call Report construction balances show which banks carry this exposure at scale, and observed terms capture who is quoting on properties still in lease-up.