Physical Occupancy as Leading Indicator in Commercial Real Estate

Commercial real estate market is experiencing high vacancy rates, with many high-rise buildings reporting 10-20% vacancy rates. The physical occupancy data from swipe cards shows most markets peaking at 50% physical occupancy, indicating a significant decrease in economic occupancy. Just like in residential mortgage market where non-payment is a leading indicator of loss, in commercial real estate, low physical occupancy is a leading indicator of economic occupancy.