Physical occupancy counts occupied units; economic occupancy counts rent actually collected against potential. The gap exposes concessions, delinquency, and below-market leases that a unit count hides.
The example
$46k collected of $52k potential.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | 46000 / 52000 | — |
| 3 | Economic occ | → ~88.5% |
The formula
The formula:
How it works
How it works:
- Physical occupancy = occupied units ÷ total units — the door count.
- Economic occupancy = collected rent ÷ gross potential rent (all units at market).
- A gap (economic < physical) means concessions, loss-to-lease, or delinquency.
- Closing the gap can raise revenue without filling a single unit.
A full building can still be economically half-empty. 95% physical occupancy looks great, but if concessions, below-market renewals, and unpaid rent drag economic occupancy to 82%, the property is leaving real money on the table. The two metrics together tell you whether the problem is filling units (physical) or monetizing them (economic) — completely different fixes.
Try it: interactive demo
Collected, potential rent; occupied, total units.
Variations
Physical occupancy
Door count:
Occupancy gap
Lost monetization:
Revenue at full economic
Upside:
Pitfalls & errors
Potential at market. Gross potential rent values every unit at market rent.
Collected, not billed. Economic occupancy uses cash collected.
Zero potential. No GPR gives #DIV/0!.
Practice workbook
Frequently asked questions
How do I calculate economic occupancy in Excel?
How is it different from physical occupancy?
Why can a full building still underperform?
Stop fighting formulas. Learn them in a day.
This recipe is one of hundreds of real-world formulas we teach. Our Excel Formulas & Functions class covers lookups, logic, text, and dynamic arrays hands-on — live in Dallas–Fort Worth, Houston, Austin, Oklahoma City, Denver, or online.
See the Formulas & Functions Class