01Step 1: Determine the Total Rentable Space
- The first step in calculating the vacancy rate is to determine the total rentable space of the commercial property. This includes all the leasable areas that are available for tenants.
- Measure the square footage of each rentable unit in the property, including individual offices, retail spaces, and common areas.
- Sum up the square footage of all the rentable units to get the total rentable space of the property.
02Step 2: Determine the Total Vacant Space
- Next, you need to determine the total vacant space in the commercial property. This includes all the unoccupied or available units.
- Identify the units that are currently not leased or are vacant.
- Measure the square footage of each vacant unit and sum up the square footage to get the total vacant space.
03Step 3: Calculate the Vacancy Rate
- To calculate the vacancy rate, divide the total vacant space by the total rentable space and multiply by 100.
- Vacancy Rate = (Total Vacant Space / Total Rentable Space) * 100.
Conclusion
Calculating the vacancy rate is a fundamental process to evaluate the performance and profitability of a commercial real estate property. It helps investors and property owners make informed decisions regarding leasing strategies, rental income projections, and potential rental yield. By following the steps outlined in this article, you can accurately calculate the vacancy rate and gain valuable insights into your commercial property investment.
| Methods | Details |
|---|---|
| Step 1 | Determine the Total Rentable Space |
| Step 2 | Determine the Total Vacant Space |
| Step 3 | Calculate the Vacancy Rate |
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