Physical vs. Economic Vacancy in Commercial Real Estate
In real estate, the vacancy rate is the amount of units that are unoccupied over a specific time period. It is usually referred to as a percentage. However, there are actually two distinct types of vacancy: physical vacancy, which refers to the amount of time a unit or units sits vacant, and economic vacancy, which refers to the amount of rent a property owner has lost due to the vacancy of their property.
Occupancy Rate in Commercial Real Estate
Occupancy rate is an important metric for temporary housing, and can be measured by dividing the number of occupied units by the number of available units.
Breakeven Occupancy in Commercial Real Estate
Breakeven occupancy is the occupancy at which a commercial real estate property goes from having an operating deficit to an operating surplus. It can also be defined as the point at which effective gross income (EGI), equals operating expenditures (OpEx) and debt service. If a property is exactly at breakeven occupancy, it's DSCR will be exactly 1.00.