Economic Vacancy vs. Physical Vacancy: Definitions & Calculations

What is the Difference Between Physical Vacancy and Economic Vacancy?

One of the most important line items in any commercial real estate proforma is the property’s vacancy rate.  However, vacancy rate is a commonly misunderstood term as there are actually two types of vacancy: physical vacancy and economic vacancy. In this article, we’ll define physical vacancy and economic vacancy, show how to calculate them, and […]