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Economic Occupancy Calculator

Economic occupancy = rent collected ÷ gross potential rent. It is the single best revenue metric because it captures everything — physical vacancy, concessions, loss to lease, credit loss, non-revenue units. Physical occupancy is vanity; economic occupancy is sanity.

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Economic occupancy

86.1%

Physical occupancy

95.0%

Gap (physical − economic)

8.9%

Total revenue leak

$100,000

Physical vacancy loss

$36,000

Concession/credit/other loss

$64,000

How the math works

Physical occupancy counts occupied units. Economic occupancy counts collected rent as a share of gross potential. A 95% physically occupied property can leak to 88% economic occupancy through concessions, loss to lease, credit loss, and non-revenue units (employee, model, maintenance).

The gap (physical − economic) is the single best read on whether advertised occupancy actually turns into cash. Watch for large gaps — they reveal concession-heavy lease-ups and collection problems.

How to Use

  1. Enter gross potential rent (every unit at market rent, fully occupied).
  2. Enter rent actually collected from the last complete year.
  3. Enter physical occupied unit count and total unit count.
  4. Read economic occupancy, physical occupancy, and the revenue leak breakdown.

Frequently Asked Questions

Healthy gap size?

A 2-4% gap is normal. 5-8% suggests concession-heavy lease-ups or meaningful collection problems. 10%+ almost always signals a rent roll that will not hold up under ownership transition.

Should employee units count as vacant?

Physically no, economically yes. A rent-free employee unit is 100% economic vacancy — no rent collected. Include it in the leak analysis.

Why does the lender care?

Loans size off NOI, and NOI starts with EGI, which starts with economic occupancy. A physical 95% / economic 86% property gets underwritten at economic — not the marketing number.

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