Absorption Rate: Tracking Commercial Market Trends
Is the Market Heating Up or Cooling Down? Absorption Rate Tells the Story
In real estate, knowing whether the market favors buyers, sellers, landlords, or tenants comes down to one key metric: absorption rate. This number reveals how quickly space is being leased or sold and whether demand is rising or slowing.
What Is Absorption Rate?
Absorption rate measures the net change in occupied space over a specific period.
- A high absorption rate means properties are leasing quickly, signaling strong demand.
- A low or negative absorption rate means more space is becoming available than being occupied, which can lead to longer lease-up times and better deals for tenants.
Why It Matters
- For Landlords & Sellers – If absorption is slowing, overpricing could leave your space sitting vacant for longer.
- For Tenants & Buyers - A lower absorption rate means more options and stronger negotiating power.
Market conditions shift quickly, and the absorption rate is one of the best ways to stay ahead. If you are considering leasing, buying, or selling, let’s talk about what the latest trends mean for you.
