General Vacancy and Credit Loss are calculated exactly the same way within Assess, although they mean different things and as a result represent different assumptions.
An underwriting tool used to discount scheduled revenues by some figure, often around 5-10%, to account for unforeseeable tenant vacancy.
An underwriting tool used to discount schedule revenues by some figure in order to account for tenant credit risk.
Tenancy Loss Methods
All Tenant Income
The General Vacancy Loss factor will reduce actual scheduled income from tenants.
All Market Income
If selected, the General Vacancy Loss will only apply to those spaces designated as "Market" (i.e. not "Contract") on the Rent Roll tab. An underwriter might elect to use this option if there were a credit tenant already under contract whose income could be considered nearly certain.
Dynamic Loss (Contract)
Dynamic Loss adjusts the vacancy deduction based on the percentage of rental income designated as "Contract" versus "Market." Dynamic Loss selects the lesser of the actual percentage of the property's income that is designated as Market, and the specified "Dynamic Loss %." For example, let's say that a property's Dynamic Loss % is 5%, and rental income is 90% Contract / 10% Market. Dynamic Loss uses the lesser of 10% and 5% to calculate a vacancy deduction - in this case 5%. If this same property's rental income is 98% Contract / 2% Market, then Dynamic Loss uses the lesser of 2% and 5% - in this case 2%.