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NOI Margin Calculator

NOI margin measures how much of every revenue dollar falls to NOI after operating expenses. A high margin means efficient operations; a low margin means expense drag. Use this calculator to benchmark and identify opportunity.

$
$

NOI margin

60.00%

NOI

$720,000

Operating expense ratio

40.00%

How the math works

NOI margin = NOI ÷ EGI. It tells you the operational efficiency of the property independent of capital structure. Higher margins mean more cash available for debt, capex, and owner distributions.

Low margin at acquisition is actually an opportunity — expense trimming, lease restructuring, or utility billback (RUBS) can lift margin 3-8 points and translate directly into value at exit cap.

How to Use

  1. Enter effective gross income (EGI).
  2. Enter total operating expenses (excluding debt service, capex, depreciation).
  3. Read NOI and NOI margin %.

Frequently Asked Questions

What's a good NOI margin?

Multifamily: 55-65% is typical stabilized; garden-style 60-70%, high-rise 45-55%. Retail: 65-75%. Office: 45-60% depending on service levels. Industrial: 75-90% since tenants cover most OpEx under NNN leases.

What drives margin?

Lease structure (NNN vs gross), asset class, age, utility metering (RUBS vs owner-paid), management efficiency, tax burden, and insurance costs. New construction starts at peak margin and drifts down as systems age.

Should I include capex?

No — NOI excludes capex, debt service, depreciation, and income tax. 'Cash flow margin' (after debt + capex) is different and typically 20-40 percentage points lower.

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