In commercial real estate, the difference between the total amount of newly occupied space and the total amount of vacated space over a specific period is a key indicator of market health. This metric reflects the change in occupied inventory. For instance, if a market sees 100,000 square feet of new tenants moving in and 50,000 square feet of tenants leaving, the resulting figure is 50,000 square feet, indicating positive movement in demand.
This figure provides valuable insights into the strength of demand for available properties and serves as a leading indicator of future rent growth and investment opportunities. Historically, periods of strong positive figures have coincided with increased development activity and rising property values. Conversely, negative figures often signal a weakening market, potentially leading to decreased construction and declining rents. This calculation is crucial for investors, developers, and analysts to understand the underlying dynamics of the real estate landscape.
