Glossary term
Absorption
Absorption is the number of units a market or building leases over a period. It shows how fast new and vacant apartments are being taken.
Absorption counts net units that become occupied during a period, such as a month or a year. Positive absorption means more units were leased than were vacated.
For a new building, absorption rate is the pace at which it leases up. If a 200-unit community leases 20 units a month, it reaches stabilized occupancy in about ten months, all else equal.
Market-wide, strong absorption relative to new supply supports rent growth. Weak absorption can lead to concessions and falling occupancy.
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