Debt Yield

Debt yield = NOI / loan, the lender return that ignores rate and amortization and often caps the loan in tight credit; or the max loan a target debt yield supports. NOI $120K on a $1.5M loan = 8.0%; a 10% floor caps the loan at $1.2M. The lender governs the floor.

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Formula and source

DY = NOI / loan x 100 (%); max_loan = NOI / (DY_min/100).

The commercial-real-estate debt-yield definition used by CRE lenders, by name.

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