Occupancy is a key metric when you examine a real estate investment trust (REIT) like Realty Income (NYSE: O). The logic is pretty simple: Vacant properties don't generate any revenue. So it might seem troubling that Realty Income is warning investors to expect weaker occupancy metrics in the future. But the truth is, it is actually a good thing. Here's why.

Realty Income's occupancy was 98.8% at the end of the third quarter of 2023. That was down from 99% at the end of the second quarter and 98.9% in the third quarter of 2022. That's not a great sign, as it suggests the REIT is having trouble keeping tenants.

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Source Fool.com