What is defined as occupancy rate in property management?

Occupancy rate in property management is defined as the percentage of leased space to total available space. This metric is crucial because it provides insight into how effectively a property is being utilized. A higher occupancy rate indicates that a larger portion of the available space is leased, which typically enhances the property's overall revenue potential and indicates strong market demand.

Understanding the occupancy rate allows property managers to evaluate their leasing strategies and market positions. By comparing the occupancy rates over time or against similar properties in the market, management can gauge performance and identify areas for improvement. Additionally, maintaining a steady or high occupancy rate is essential for sustaining positive cash flow and investment returns.