How to Calculate Debt Yield in Commercial Real Estate
A simple, blunt guide on how to calculate debt yield. See the exact formula commercial lenders use, run the numbers, and find out if your deal clears the hurdle.
12 posts found
A simple, blunt guide on how to calculate debt yield. See the exact formula commercial lenders use, run the numbers, and find out if your deal clears the hurdle.
CMBS lenders often focus on debt yield because it is independent of appraised value, interest rate, and amortization.
Walk through a commercial mortgage loan sizing example using DSCR, LTV, and debt yield to find the binding constraint.
Debt yield and cap rate both use NOI, but cap rate measures asset pricing while debt yield measures lender protection.
Debt yield and DSCR both measure CRE credit risk, but only one depends on loan terms. Learn when each metric controls loan proceeds.
Debt yield and LTV are both loan sizing constraints, but one is driven by NOI and the other by property value.
Showing 1–6 of 12 posts