Occupancy Cost Ratio (OCR)

Occupancy cost ratio is total occupancy expenses (rent plus operating costs) as a percentage of tenant revenue, measuring space cost burden for commercial tenants.


CalculationFormula
OCR((Base rent + Operating expenses + Taxes) / Tenant revenue) times 100
Commercial metricPrimarily used in office and retail
Tenant perspectiveMeasures affordability of space
Landlord insightHelps understand tenant retention risk
OCR Benchmarks by SectorTypical Range
Retail5% to 15% of sales
Office (professional services)3% to 8% of revenue
Office (financial services)5% to 10% of revenue
High OCR riskAbove 15%, tenant stress likely

Related Terms

Operating ExpensesRental RateCommercial PropertyTenant Risk

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