What does "economic occupancy" refer to?

Economic occupancy specifically refers to the percentage of income-generating units compared to the total units available in a property. This concept is crucial in property management and real estate because it directly impacts the financial performance of a property.

Economic occupancy takes into account not just the physical presence of tenants but also their ability to contribute to the income stream of the property. For instance, a property can have a high physical occupancy rate, meaning many units are rented, but if those units are rented at below-market rates or are occupied by tenants who do not pay consistently, the economic occupancy may be low. This metric gives property managers a clearer understanding of the actual revenue being generated and is essential for financial planning and assessment of the property's performance.

Understanding economic occupancy helps property managers make informed decisions regarding pricing strategies, tenant retention efforts, and overall property management practices, ensuring that the financial goals of the property are achieved.