Vacant space is the total rentable area (RA) of all space that is available to let or for sale within 3 months from now (the sum of both nominal and structural vacancies). This is within a defined geographical area for a specific real estate asset class.
When does a property actually become vacant and enter the total amount of vacant space in a market? Is it when the space is empty? The answer is no, not always. For example, what happens if a tenant takes occupation in 5 years from now (but it will take 1 year for tenant improvements (TI)), but will be vacant until then? The clear cut answer is that a property is vacant if it can be leased (has no contractual holds over it that prevent it from being leased and occupied) and is not.
A vacancy ends when the contractual hold of a new tenant or owner prevents any other tenant/owner from occupying the space (it does not technically end when the new tenant/owner takes occupation).
