Stabilized Yield Calculator

Stabilized yield compares stabilized NOI to all-in project cost. This calculator runs the metric.

Stabilized NOI

Acquisition cost

Hard costs

Soft costs

Carry cost

Stabilized yield

8.30%

Total cost

$11,450,000

Cost per $ NOI

$12

How the math works

Yield = stabilized NOI ÷ total cost (acquisition + hard + soft + carry).

Sign contracts with escalation clauses anchored to stabilized yield, not raw hard cost. If hard costs rise 8% but stabilized NOI can be pushed up 8% via rent comps or programming changes, yield is protected — contract structure should incentivize the second lever, not just the first.

How to Use

Enter stabilized NOI.
Enter acquisition cost.
Enter hard costs (construction, rehab).
Enter soft costs.
Enter carry cost during construction.
Read stabilized yield.

Frequently Asked Questions

Target yield?

Development: 6.5-8.5% for MF, 8-11% for industrial. Heavy value-add: 7.5-10%. Light value-add: 6-8%. Compare to market cap rates — if stabilized yield is <100 bps above market cap, development risk isn't compensated.

Development spread?

Stabilized yield − market cap rate at stabilization = development spread. 150-250 bps is industry benchmark. Below 100 bps signals over-leverage to market or discipline gaps on cost.

Common mistakes?

Omitting carry cost and legal/permitting soft costs. Using current rents instead of stabilized. Ignoring pre-opening marketing and lease-up concessions. Each pulls yield 50-150 bps higher than reality.

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.