That depends on which occupancy you’re talking about. There are two kinds: physical and economic.

Physical occupancy is determined by dividing the amount of square feet or number of apartment units occupied by the total number of square feet or number of apartments that are available for rent.

Economic occupancy is determined by dividing the amount of rent collected by the total amount of rent scheduled to be collected. The difference between collected rent and scheduled rent could be the result of concessions, discounts and leasing commissions.

Physical occupancy is the number most frequently used by brokers and sellers. Needless to say, economic occupancy gives you a truer picture of the potential value of a property. A property with 95% physical occupancy can have a 75% economic occupancy. To make a value determination both occupancies have to be compared to what is left after expenses and what is left after paying debt service.