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Cross-Collateralization Risk Calculator
Cross-collateralized loans concentrate risk. This calculator sizes contagion exposure.
Contagion exposure
$3,000,000
Concentration risk %
18.00%
Safe margin %
82.00%
How the math works
Risk scales with weakest property concentration. Weaker weakest-asset = higher contagion.
When one asset in a cross-pool contributes under 5% of NOI, contagion is limited. Over 20% = dangerous — one distressed tenant on the big building can break the loan.
How to Use
- Enter loan balance.
- Enter pool property count.
- Enter weakest property NOI %.
- Enter pool break-even threshold.
- Read contagion exposure.
Frequently Asked Questions
Why cross-collateralize?
Lender concession — lower rate, higher proceeds, fewer covenants per property. Borrower gets scale benefits but loses ability to sell or refinance individual properties without lender consent.
Exit friction?
Selling cross-collateralized property requires partial release price (often 110-125% of allocated loan). Makes cherry-picking weak assets expensive; you're forced to carry them.
Mitigation?
Release provisions (pre-agreed price per property). Single-property carve-outs on best assets. Maintain portfolio DSCR cushion. Cross-default with cross-collateralization doubles risk.
How often should I rerun this?
Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.
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