This paper examines index revision in measuring the

We consider the term structure of lease rates in a general setting where both rents and interest rates are stochastic. The framework is applicable to any leasing market, but we focus on real estate. We find that the ``expectations hypothesis", that is, forward rates are unbiased estimators of future rents, requires similar assumptions as in interest rate theory to hold. To study bias magnitude, simulations are performed using a parameterization of the general framework. Different realistic values for risk aversion and interest rate stochastics can generate widely different shapes of the term structure, holding objective expectations constant. Thus an expected increase in rent is consistent with a downward-sloping term structure and vice versa. Copyright 2003 by the American Real Estate and Urban Economics Association

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This paper considers a class of leases with indexed rents subject to a floor. Such leases have an upward-only flavour to them, although not in exactly the same sense as in the traditional upwardonly institutional lease. After deriving a general result, three empirically important cases are considered: a modified upward-only lease, the Swedish standard contract for commercial leases and the percentage lease. Analytical results and numerical examples are used to illustrate how the leases relate to other contract types.

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