Question 1

How do I calculate occupancy rate?

Accepted Answer

Occupancy Rate = (Occupied Units ÷ Total Units) × 100. For a single-family rental or commercial property, it's binary (0% or 100%) at any given time, so track it as an average over a period. For multifamily, calculate it monthly: occupied units on the last day of the month divided by total units. Most property management software calculates and exports this automatically.

Question 2

What is a good occupancy rate by asset type?

Accepted Answer

Multifamily residential: 93-95%+ is considered strong, below 90% warrants attention. Self-storage: 85-90% economic occupancy is typical for a stabilized asset. Retail: varies widely by market, but 90%+ for a well-located center. Office: 80-85% was pre-pandemic normal; markets are now more bifurcated. Industrial/warehouse: 95%+ in most strong markets. Always compare to your submarket, not national averages.

Question 3

How do I show occupancy vs benchmark on the same chart?

Accepted Answer

Plot your actual occupancy rate as the primary line. Add a horizontal reference line for your underwritten occupancy assumption (e.g., 93%) and optionally a second line for the submarket average if you have that data. This immediately shows LPs whether the asset is performing at, above, or below expectations — and gives context for any variance.

Question 4

How does seasonal variation affect occupancy data?

Accepted Answer

Many property types show seasonal occupancy patterns — student housing peaks in August/September and dips in summer, vacation rentals invert that pattern, retail centers peak around holidays. When presenting occupancy trends, compare year-over-year rather than month-over-month to eliminate seasonal noise. Annotate the chart with major lease events (large tenant move-outs, renovations) that affected specific periods.

Question 5

How should I present occupancy rate in an LP update?

Accepted Answer

Show the trend over the reporting period alongside the underwritten occupancy assumption. If occupancy dropped, explain why (lease-up after renovation, market softness, large tenant departure) and what you're doing to recover. If occupancy is above target, explain what's driving it (strong market, below-market rents driving retention). LPs respond well to proactive narrative, not just data.

Occupancy Rate Chart

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FAQ: Occupancy Rate Chart