In one sentence
A tenant's total occupancy cost as a percentage of its sales, a health check for retail tenants.
The longer version
For retail, occupancy cost as a share of tenant sales signals whether a tenant can sustain its rent. High ratios flag tenants at risk of failing or demanding relief, which matters to the income underwriting a loan relies on.
Lenders diligence major retail tenants partly through this lens, tying tenant health to the durability of the property's cash flow.
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