Economic occupancy

Economic occupancy describes revenue performance rather than whether a unit is physically occupied. A common property-level version divides rent realized for a period by the rent that could have been scheduled for the same available units and period. Because operators use different numerators and denominators, a useful report states whether it uses billed rent, collected rent, effective gross income, concessions, credit loss, and units unavailable for renovation.

Build the denominator from the same units and dates as the numerator. Then show vacancy, concessions, and unpaid occupied-unit charges separately instead of compressing every reduction into one unexplained percentage. Physical occupancy can remain high while economic occupancy falls because an occupied household has an open balance or because signed concessions reduce collections. The reverse can occur temporarily when prior-period payments enter the current cash total.

Consider four units with supportable scheduled rent of $6,000 for June. One unit is vacant for half the month, creating $750 of vacancy loss; an occupied tenant receives a documented $100 concession; and another $150 remains unpaid at the reporting cutoff. On a simple realized-rent basis, $5,000 divided by $6,000 produces 83.3% economic occupancy. The calculation becomes useful only when the report also exposes the three different causes of the $1,000 gap.

Red flags include changing the denominator when a unit performs poorly, counting collections from old balances as current-period rent without disclosure, or comparing cash-basis and accrual-style percentages as though they were identical. Lock the reporting policy, retain the source rent roll and ledger, and compare the component losses over time. Economic occupancy is a diagnostic summary, not evidence that one tenant or one leasing decision caused the result.