Economic Vacancy Calculation
Hey monkeys,
I am wondering how you all calculate economic vacancy as I am hearing some differing opinions at my firm (and from what I was taught in undergrad). Looking at my Argus line items, I would calculate economic vacancy as
Potential Base Rent - Absorption & Turnover Vacancy - Free Rent - Vacancy & Credit Loss = Economic Vacancy
Others are saying to include TIs and LCs, but I personally think that is going beyond what Economic Vacancy encompasses. Thank you all for the help.
.
Don't forget net bad debt and non-revenue. I agree that TIs and LCs aren't part of the economic vacancy calculation.
What’s the difference between : 1)Vacancy and turnover vacancy? A unit that’s vacant versus and unit which a tenant left? 2)credit loss versus bad debt?
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