Occupancy Rate

Physical vs. Economic Vacancy in Commercial Real Estate

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 in Commercial Real Estate

Occupancy rate is one of the most important metric for temporary housing, which includes multifamily properties like apartment buildings, as well as hospitality properties, like hotels, motels, and resorts. Occupancy rate can be measured by dividing the number of occupied nights by the number of available nights.