Commercial Debt Yield Calculator

Debt yield is the lender's 'what would I make if I foreclosed tomorrow?' number. Because it's rate-independent, it's the most durable size constraint. This calculator compares current DY to both the minimum (closing threshold) and target (underwriting cushion) and returns the max loan at each level.

Stabilized NOI

Proposed loan amount

Lender minimum debt yield

Target debt yield (for underwriting)

Current debt yield

9.00%

Max loan at minimum DY

$8,000,000

Max loan at target DY

$7,200,000

Loan vs max DY (+ means over)

Meets minimum DY

Yes

How the math works

Commercial debt yield (NOI ÷ loan) is rate-independent — unlike DSCR, it doesn't flex when rates move. Bank CRE lenders often require 8-9%; CMBS and debt funds 10%+; hotels 11-13%. This calculator compares a proposed loan to both minimum and target thresholds.

At loan request time, underwriters often use a higher 'target' DY than the minimum to build cushion for NOI erosion during hold. Paper your pro forma to the target, not the minimum.

How to Use

Enter stabilized NOI and proposed loan amount.
Enter lender minimum DY and your target DY for sizing.
Read current DY and max loans at both thresholds.

Frequently Asked Questions

Minimum vs target — why both?

Minimum is the lender's floor — below that, they won't close. Target is your internal underwriting. Size to target to build cushion; if NOI erodes 10% during hold, you're still above the lender's minimum covenant.

Why asset-class differences?

Hotels and operating-intensive assets (senior living, self-storage management-intensive) need higher DY because NOI is more volatile. Triple-net office is most stable — lowest required DY.

Agency multifamily?

Fannie Mae and Freddie Mac typically 7-8% minimum DY on core multifamily. Non-core locations and older product: 9%+. Debt yield is often the binding constraint, not LTV or DSCR on agency deals.