For our users in the Asia-Pacific region, the term "Tenancies" is used, while customers in Europe may refer to this as "Tenancies", and in North America, the term "Leases" is used. For clarity, this article will use the term "Tenancies". For more information on regional terminology, please refer to our Glossary of Regional Terminology.
A Tenant Health Score is a composite metric designed to evaluate the financial stability, operational reliability, and overall risk profile of a tenant within a commercial property portfolio. It is built using term, arrears, and maintenance data, operational data from Re-Leased that provides a insight into tenant viability and potential exposure for landlords and property managers.
Strategic Objectives
Risk Mitigation
Early warning system: Highlight tenants at risk of default, non-renewal, or potential lease disputes.
Prioritisation: Direct asset managers' attention to high-risk leases or tenants requiring proactive engagement.
Portfolio Management
Forecasting: Inform future cash flow expectations and portfolio churn modelling.
Retention planning: Identify stable, high-performing tenants for early renewal outreach or upsell opportunities.
How does it Work?
Today the tenant health score takes an equal blend of arrears, term and task data to identify tenant health.
Arrears
Arrears Component – Scoring Logic
The arrears component evaluates a tenant’s payment reliability in alignment with the client’s defined arrears policy. Each company can configure up to four arrears escalation points for overdue invoices, forming the basis for automated communication workflows.
Tenants begin with a full arrears score of 100%. For each escalation threshold breached, 25% is deducted from their arrears score. For example, if a company has implemented an arrears workflow where the first notice is issued two days after an invoice becomes overdue, followed by subsequent notices at seven days and beyond, a tenant breaching all four escalation points would see their arrears score reduced to 0%. This indicates a high-risk status due to persistent non-payment.
This structured deduction approach provides a transparent and consistent method of quantifying arrears-related risk across the tenant base.
Company Arrears Rules (days) | ||||
|---|---|---|---|---|
0 | 2 | 7 | 14 | 28+ |
100% | 75% | 50% | 25% | 0% |
Terms
The term component evaluates the proximity and status of upcoming critical lease events within a tenant’s active lease. By default, the monitoring window begins six months prior to a key event. As the event draws nearer without action being taken, the tenant’s term score gradually deteriorates—reaching zero if the event passes without resolution.
Key events such as lease expirations and renewals are treated with the highest sensitivity, as they directly impact tenancy continuity. If unaddressed by the event date, they indicate significant risk and drive the score toward zero. Events like break clauses and rent reviews, while less immediately consequential, still present opportunities to reinforce tenant engagement or optimise lease terms. Inaction in these cases will also result in score deductions, though with slightly more leniency.
Importantly, the term component is forward-looking only; it does not consider historical renewal patterns. Even if a tenant has renewed multiple times in the past, this behaviour does not positively influence their current term score. This is by design—past behaviour is not assumed to be predictive, and recurring renewals may in fact signal readiness for change, such as expansion or relocation.
As one of the earliest indicators of tenant risk, the term component plays a critical role in proactive lease and relationship management.
Maintenance
For this component we have worked under the assumption that planned maintenance should not have a negative impact against the tenants health however, For this component we have worked under the assumption that planned maintenance should not have a negative impact against the tenants health however an increased volume of reactive maintenance is certainly a risk as is an irritation and inconvenience for a tenant to continuously have to repair or fix their space. Looking back over a time frame of 12 months we've made the decision that any more than two maintenance tasks within that year should start to depreciate this score. It must be noted that this is still a beta component and other reactive tasks should be brought into play to gauge a full impact on terminal.
Reactive Maintenance | |||||
|---|---|---|---|---|---|
0 | 1 | 2 | 3 | 4 | 5 |
100% | 100% | 100% | 80% | 60% | 40% |
The THS Dashboard - How it all comes together
Introducing the Tenant Health Score Dashboard
The Tenant Health Score (THS) Dashboard consolidates the three core health indicators—arrears, term, and maintenance—into a single, unified view of tenant performance across a client’s portfolio. It visually presents the distribution of tenants across quintiles of the overall health score, helping identify:
High-performing tenants with strong engagement and minimal risk, ideal for relationship expansion or upsell opportunities.
At-risk tenants exhibiting signs of distress, requiring targeted intervention to mitigate potential churn or default.
To provide deeper strategic insights, the THS is segmented across three key dimensions:
Lease Type
Property Type
Tenant Industry
These lenses allow users to assess tenant health patterns and concentration risks across different asset classes and sectors.
At the foundation of the dashboard is a detailed tenancy schedule, listing individual tenants alongside their component and aggregate scores. This schedule is fully filterable by THS quintile, enabling precise review and action planning.
As with all Insights dashboards, users can apply filters by tenant, industry, property manager, or company to tailor the view to specific portfolio segments, enhancing strategic decision-making and operational oversight.