Rent comparables, often shortened to rent comps, are recently leased units or spaces that are similar in size, quality, location, and amenities to a subject property, used to estimate what rent that property can realistically achieve. Appraisers, brokers, and asset managers pull comps from nearby buildings with comparable finishes and unit mixes to build a market rent estimate that reflects actual, current transactions rather than asking prices alone.
Good comps account for more than just headline rent. Concessions, included utilities, lease term, and the age or condition of the comparable property can all affect how directly a figure should be applied to the subject asset, so analysts typically adjust raw comp data before using it in underwriting. Rent comps play a central role in setting proforma rent assumptions, evaluating loss to lease, and supporting the rent growth projections that drive a property's overall return forecast.
Further reading: Understanding Cap Rates: Context Cycles and the Real Measure of Value
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