Albert Einstein once said, “Pure mathematics is, in its way, the poetry of logical ideas.” While math may seem like poetry to one of the world’s most famous physicists of all time, it probably doesn’t sound like a barrel of fun to most commercial real estate professionals.
Well, when it comes to break-even occupancy rates, anyway. They’re more stressful than poetic.
With all the data CRE pros have to crunch, it can sometimes be difficult to even establish the occupancy rate break-even point in the first place. Fortunately, CRE software such as Quarem’s can help establish this in even the most dynamic portfolios. How? Read on.
Calculating Break-Even Occupancy Rate
In case you need a refresher, the break-even occupancy rate is the percentage of the property that must be occupied to cover operating expenses and debt. You get it by dividing the latter two by potential rental income. For example, if a property has $1 million in potential rent income and your operating expenses ($350,000) and debt ($250,000) are a combined $600,000, your break-even occupancy rate is 60%.
Healthy break-even occupancy rates depend on a variety of factors, from market vacancy rates to the history of the property. Not only is it difficult to establish the break-even point for occupancy rates in the first place, it’s even more complex when you add in the outside factors and account for multiple properties.
How CRE Software Helps with Break-Even Occupancy Rate
The break-even occupancy rate is just one of the valuable reporting tools that you’ll enjoy with commercial real estate software like Quarem. By automating all of the factors that determine it — location, real estate type, lease schedules, expirations, etc. — Quarem lets you easily generate break-even occupancy rate reports across all your portfolios, no matter how dynamic or diverse they are.
The reporting doesn’t stop there.
CRE software can help with virtually any other lease administration-related report you may need, from project monitoring (hours/time, notes, responsibilities, etc.) and property tracking (income/expenses, vendors, equipment, etc.) to assets/inventory management (warranties, maintenance, insurance, repairs, etc.). No CRE analytic report need is a problem for the right CRE software.
Want to see for yourself how CRE software can help you establish break-even occupancy rate in commercial real estate? Request a demo of Quarem today!
