Overview · What & why
A decision, before a calculation.
Gross potential rent assumes all rentable space is occupied at the stated rent. Vacancy removes income from empty space; credit loss reflects billed amounts that are not collected. Concessions reduce receipts during negotiated free-rent periods. These are different mechanisms and should be visible rather than hidden in a single optimistic revenue number.
A concrete example
100,000 SF × $10 = $1M gross potential rent. At 95% occupancy, base rental revenue is $950K. A $20K concession reduces effective income to $930K before any recoveries or other revenue.
What to remember
Separate the right to receive rent from the cash actually expected.
Before using this in a project: Rentable area, signed lease terms, vacancy schedule, collection history and concession commitments.