Absorption Rate
The amount of leased or sold real estate space absorbed by tenants or buyers over a defined period, typically reported as square feet per quarter for office, industrial, and retail. Absorption is the demand side of the real estate cycle. The pro signal for cycle phase is not counting cranes but tracking the ratio of absorption to deliveries -- when scheduled deliveries run 2x or 3x trailing absorption, hypersupply is essentially priced into the supply math regardless of how the spot market currently reads.
Related terms
AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management · Book Value per Share
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