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In the world of multifamily real estate investment, understanding key performance metrics is crucial for property owners and investors.
The leased percentage in multifamily properties is often higher than the occupancy percentage. This difference arises because the leased percentage accounts for units that have been rented out but are not yet physically occupied by tenants.
This analysis provides important insights into the property's current status and potential financial health.
Occupancy represents the number of units currently inhabited by tenants, known as physical occupancy.
The leased percentage offers a snapshot of future occupancy, as it includes all units for which a lease has been signed, irrespective of whether the tenant has moved in.
Recognizing these distinctions can aid in making informed strategic decisions.
Economic occupancy intersects with these concepts since it reflects the total rent collected compared to the potential rent from full occupancy at market rates. This metric helps property owners assess how efficiently they are capitalizing on their rental units.
By keeping a close eye on these indicators, stakeholders can improve their real estate strategies, ensuring optimal performance of their multifamily properties.
