Glossary term
Occupancy Rate
Occupancy rate is the share of a property's units that are occupied. It is occupied units divided by total units, shown as a percentage.
The formula is occupied units / total units. A 100-unit building with 94 occupied units is 94 percent occupied. Physical occupancy counts units with a resident living in them, whether or not rent is being paid.
Occupancy is a headline number, but it can hide problems. A building can be full because rents were cut or concessions are heavy. For that reason, owners also track economic occupancy.
Managers watch occupancy together with lease expirations and pre-leasing to plan renewals and marketing before units go vacant.
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