In which situation will the Lost Absorption/Turnover Rent be reported?

Lost Absorption or Turnover Rent refers to the revenue that property owners miss out on when a tenant does not renew their lease or when a unit remains vacant. This concept often comes into play before a new lease begins since it identifies potential losses in income based on properties that were occupied.

When reporting Lost Absorption/Turnover Rent, it's crucial to acknowledge that these losses are calculated and reported prior to the commencement of a new lease. This allows property managers and owners to assess the financial impact of vacancies on their overall cash flow and make informed decisions regarding future leasing strategies.

While lease renewal periods, tenant vacancies, and occupancy thresholds can influence the understanding of rental performance, it is primarily the timing relative to the lease start date that dictates when Lost Absorption/Turnover Rent should be recognized. This highlights the importance of proactively managing potential vacancy losses during transitional phases between leases.