If I had to teach this in one paragraph, I would start here: vacancy is not a one-off event; it is an ongoing cost that compounds when tenants cluster. Core idea: Every month a unit sits empty costs rental income, increases per-unit fixed costs and may pressure the landlord to accept worse lease terms. Why it matters: That matters because optimistic occupancy assumptions are behind most real estate investment disappointments. In real life: A commercial property with three tenants whose leases all expire within 12 months faces a correlated re-leasing risk that most pro formas understate. Common slip: The mistake is underwriting 95% occupancy on a building that has historically averaged 88% without explaining what changed. Try this: If you had to teach this without jargon, what would you tell someone to monitor first? That is usually where the edge is: not in the vocabulary, but in the structure underneath it.