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Vacancy Sensitivity Calculator

Vacancy directly reduces NOI dollar-for-dollar. This calculator shows NOI and exit value impact across vacancy scenarios from sub-market lows to recessionary highs.

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Base case value

$8,833,333

Low-vacancy value

$9,333,333

Stress value

$7,500,000

Stress NOI

$450,000

Base → stress value loss

$1,333,333

How the math works

Vacancy hits NOI on a 1-for-1 basis (less some variable expense savings, which are small for fixed-heavy multifamily). A 10% vacancy jump on $1M GPR = $100k NOI loss.

At a 6% exit cap, $100k NOI loss = $1.67M of value destruction. Stress-testing vacancy at double historical norms exposes this risk before you commit capital.

How to Use

  1. Enter gross potential rent and operating expenses.
  2. Enter three vacancy scenarios — low, base, stress.
  3. Enter exit cap.
  4. Read NOI and value at each.

Frequently Asked Questions

Typical vacancy?

Multifamily stabilized: 5-7%. Urban class-A: 4-6%. Suburban class-B: 6-9%. Retail: 5-10% with co-tenancy risk layers. Office: 10-20% post-COVID. Industrial: 3-6%.

How do I know when to stress?

If the submarket historical vacancy peaked at 15% in a prior recession, that's your stress case. Institutional underwriters require scenario at 2x historical norm or 1.5x pro forma.

Economic vs physical vacancy?

Physical vacancy = empty units. Economic vacancy = uncollected rent (vacant + bad debt + concessions + loss-to-lease). Economic is usually 2-5 points higher than physical.

How do institutional LPs use this?

Institutional LPs expect sensitivity tables at every underwriting — base case plus at least two stress scenarios. Submit this output alongside traditional pro formas. LPs read quickly for two things: does the base case clear target IRR, and does the stress case produce positive equity multiple. If both yes, deal is investable. If stress goes negative, more equity or a lower purchase price is needed.

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