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Economic Vacancy
The percentage of gross potential rent lost due to physical vacancies, non-paying residents, rental concessions, or employee housing credits.
Economic Vacancy is the percentage of Gross Potential Rent lost due to non-revenue generating units, including physical vacancy, rent concessions, model apartments, employee housing units, and uncollected delinquent rents.
Economic vacancy provides a far more accurate assessment of real estate asset cash flow performance than physical occupancy percentages alone.
Frequently Asked Questions
How does economic vacancy differ from physical vacancy?
Physical vacancy measures unoccupied square footage. Economic vacancy measures total lost potential rent resulting from vacancies, rent concessions, employee units, model suites, and bad debt delinquencies.
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