Economic Vacancy Calculation
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.