CMBS Debt Yield Calculator

How the calculation works

Debt yield is net operating income divided by the loan amount. It answers one question: if the trust ended up owning this property, what cash return would it be earning on the money it lent?

Neither the interest rate nor the amortization schedule appears anywhere in that formula. Move the rate and DSCR moves with it. Debt yield does not budge, which is what makes it the steadier of the two sizing tests when pricing is moving week to week.

A stabilized office building throwing off $1,400,000 of net operating income, against an $18,000,000 request:

1,400,000 / 18,000,000 = 7.78% debt yield

At a 10.00% test, the same NOI supports 1,400,000 / 0.10 = $14,000,000, a $4,000,000 shortfall.

Sizing to a target

Enter the debt yield you have to clear and the tool returns the largest loan that NOI supports, the gap against what you asked for, and the NOI your requested amount would need in order to work. There is no published market minimum to plug in here, so use the figure on your term sheet.

A shortfall does not always mean a smaller loan. Sometimes it means a year of documented NOI growth before the deal goes to securitization, and sometimes it means a different execution entirely.

Estimates only. Coverage is the other constraint, and the CMBS DSCR calculator shows which of the two is binding on your request. If you want both run against live conduit pricing, the desk will do it. Get a quote or call (561) 556-2121.