Apr 17, 2019

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.