The Commercial Real Estate Alpha Site

An ‘X’ post today from Jerid Meagan

I felt this was an insightful post so I wanted to share…

“Is a 0% vacancy rate a good thing?

There is a tradeoff between low vacancy and lost rents.

A below market vacancy rate generally indicates below market rents.

Most investors and lenders will assume a 5% vacancy rate regardless of if your track record shows 2% for the trailing 5 years.

This means that should you go to sell, you will be paying for your low rents twice: 1) once when you collect the rents and 2) again when the standard 5% gets plugged in by the lender or investor.

Unintended consequences.

#propertymanagement#commercialrealestate#multifamily#realestateinvesting#commercialrealestatebroker#multifamilysyndication#realestate “