Is Leased Percent Typically Higher or Lower than Occupancy?

Is Leased Percent Typically Higher or Lower than Occupancy?

In multifamily properties, the leased percentage is typically higher than the occupancy percentage. Here’s why:

  1. Timing Differences: When a lease is signed, the unit is considered leased, but the tenant may not move in immediately. There can be a gap between the signing of the lease and the actual move-in date, during which the unit is leased but not yet occupied.
  2. Vacancy Turnover: When a tenant moves out, the unit is considered vacant. However, if a new lease is already signed for that unit, it will be included in the leased percentage, even though it is not currently occupied until the new tenant moves in.
  3. Pre-leasing: Multifamily properties often engage in pre-leasing activities, signing leases for units that are still under construction or being renovated. These units count towards the leased percentage but are not yet available for occupancy.
  4. Administrative Processes: There can be administrative lags in updating occupancy status compared to leasing status. Leases might be processed and recorded faster than occupancy changes.

Given these factors, it’s common to see a higher leased percentage compared to occupancy in multifamily properties.

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