How are mall occupancy rates determined?

Factual Questions
1

A) total % of units rented
B) total % of units rented (excluding anchors)
C) total % of square footage rented
D) total % of square footage rented (excluding anchors)
E) it depends

2

Percent occupancy should be bases on total rentable space vs space rented.

Now in an office building the usable Square footage of a space is less than the rentable square footage. The usable is what is behind the doors of the suite. The rentable includes the suites share of the lobby and the bathrooms. I do not know if malls do the same.

3

Are you asking because you are trying to figure out if a mall is healthy? Or are you asking because a news article said that a mall was X% occupied and you want to know what that means.

Its going to be off rented square footage/net rentable area. NRA will exclude common areas and other nonsense.

If you are doing some sort of analysis on the occupancy of a mall, I think its better to exclude anchors. For one thing, they make up an enormous percentage of space, but not a large percentage of the rent. In many cases, anchors own their buildings and lease the ground from the mall owner. In other cases, the anchors own both their ground and their building and pay the mall owner for common area maintenance.

So for calculating occupancy, I would measure the occupancy with and without anchors. But I am more interested in the in-line occupancy. Journalists use the total because they don’t know any better.

4

This.

5

Then they are counting total rented space/total net rentable area.

To be sure if they are reporting something like 50% then I don’t care how you are measuring it, you probably have a bad mall on your hands.

Although I have seen properties at 70% or so that I wouldn’t consider bad. Often you have a tenant who closes a store, but continues to hold the lease rights until expiration. That tenant can prevent a landlord from leasing space to a potential competitor, leaving the space dark. So the tenant continues to pay rent, but the space is dark. However, a landlord can go out and find a tenant that doesn’t directly compete and re-lease the space, often at a higher rent.