Physical Vacancy

Physical Vacancy vs. Economic Vacancy: What's the Difference?

Physical Vacancy vs. Economic Vacancy: What's the Difference?

When determining whether to invest in a commercial property, it’s essential to look at the property’s vacancy rate. There are two major types, or methods, of measuring vacancy; economic vacancy and physical vacancy. Economic vacancy represents the rental loss a property owner experiences due to vacancy over a certain time period, while physical vacancy represents the percentage of units that are vacant over a specific time period.