FAQ - What is absorption?

One market fundamental we monitor is the absorption rate.  Absorption is the amount of space or units leased within a market or submarket over a given period of time (usually one year).  Essentially absorption accounts for all inventory, and represents the market supply or demand in either a positive or negative net rate.

So remember,

If supply < demand, then vacancy decreases and absorption is positive

Whereas if supply > demand, then vacancy increases and absorption is negative