What Is Occupancy Cost Ratio?
Occupancy cost ratio is a retail leasing metric measuring a tenant's total occupancy costs — base rent, common area maintenance, and taxes — as a percentage of that tenant's gross sales.
Formula
Occupancy Cost Ratio = Total Occupancy Costs ÷ Tenant Gross Sales × 100
Why It Matters
Landlords and tenants both watch OCR closely: a ratio that's too high for the tenant's business type can signal the tenant is at risk of struggling or eventually vacating.