Property Management
A commercial property's 'occupancy cost ratio' is calculated as:
AAnnual rent divided by property value
BTotal occupancy cost (rent + CAM) divided by the tenant's annual gross sales✓ Correct
CVacancy rate multiplied by asking rent
DNOI divided by total square footage
Explanation
The occupancy cost ratio measures what percentage of a tenant's sales revenue goes to occupancy costs (rent + CAM charges). Retailers typically target a ratio of 5-15% for viability.
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