Portfolio Concentration Risk Calculator

Concentration risk measures single-point failure exposure.

Portfolio value

Largest exposure

Threshold %

Concentration %

0.15%

Over threshold

$23,000,000

Risk level

Medium

How the math works

Concentration % = largest exposure / portfolio value. Over threshold = exposure above limit.

$68M / $450M = 15.1% (above 10% threshold). $23M over-threshold. Medium risk.

How to Use

Enter portfolio total value.
Enter largest asset/tenant exposure.
Enter risk threshold %.
Read concentration ratio.

Frequently Asked Questions

Acceptable thresholds?

Institutional: no single asset > 10% of portfolio, no single tenant > 15% of NOI. Conservative: 5%/10% limits. Private/family office: up to 20%/30% acceptable for strategic assets. Diversification insurance against single-point failure.

Tenant concentration?

Single-tenant office (100% tenant concentration) demands higher cap rate (20-50 bps premium). Credit-tenant lease reduces risk. Multi-tenant NNN center diversifies tenant risk. Institutional portfolios model tenant departure scenarios.

Mitigation?

Geographic diversification (different metros). Asset class diversification (apartment + office + retail). Tenant diversification (limit top 5 tenants to 40-50%). Debt diversification (multiple lenders, maturities). Each dimension spreads 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.