What the property could collect
Annual income at full occupancy, before any vacancy deduction. Include other income only if it falls with occupancy; income that does not move, like a cell tower lease, belongs netted against operating expenses instead.
The occupancy the deal is being bought on. The cushion is the distance from here down to break-even, which is the number worth comparing against what the submarket actually did in its worst year.
What it has to pay
Annual, before debt service and before reserves. Taxes, insurance, utilities, repairs, management, payroll and administration.
Annual funding for roofs, systems and unit interiors. If the property genuinely has to fund it out of operations, it belongs in the break-even whether or not the reported NOI deducted it.
Principal plus interest for twelve months. Zero for an unlevered deal. Use the helper below if you have a loan quote instead of a payment.

$830,000 a year has to be paid regardless of how full the building is. Break-even occupancy is that figure as a share of gross potential income.

Have a loan quote instead of a payment?
The quoted proceeds.
The all-in coupon.
The schedule the payment is computed on.

Standard amortizing payment: $41,084 a month, $493,013 a year. Same arithmetic as the loan sizing calculator. During an interest-only period the payment is the loan times the rate, which is lower, and the break-even it produces is not the one the deal lives with after amortization starts.

Break-even occupancy83.0%
Cushion from the underwritten occupancy
12.0 points
Cushion in rent
$120,000
Total cash requirement
$830,000
Break-even before debt service
35.0%
NOI at the underwritten occupancy
$600,000
Cash flow after debt service
$120,000
Monthly cash flow
$10,000
DSCR at that occupancy
1.25x

What happens as the building empties

The break-even row is where cash flow reaches zero and coverage reaches 1.00x, because those are the same statement measured from different ends. Below it the owner funds the difference.

$1,000,000 of gross potential income, $340,000 of operating expenses, $10,000 of reserves, $480,000 of annual debt service.
OccupancyCollectionsNOICash flow after debtDSCR
100.0%$1,000,000$650,000$170,0001.35x
95.0%Underwritten$950,000$600,000$120,0001.25x
90.0%$900,000$550,000$70,0001.15x
85.0%$850,000$500,000$20,0001.04x
83.0%Break-even$830,000$480,000$01.00x
80.0%$800,000$450,000($30,000)0.94x
75.0%$750,000$400,000($80,000)0.83x

Annual convention throughout, and the occupancy factor is applied to the whole gross potential income. During an interest-only period debt service is lower and this number is lower with it; run it again on the amortizing payment, because that is the break-even the deal lives with for most of the term. It measures cash, not value: a property can sit above break-even and still be worth less than it cost.

Everything above is computed in your browser. Nothing you type is sent to Altyst or to the site hosting this calculator, and this frame sets no cookie. It is arithmetic on the figures you entered, not investment or lending advice.

One year of one scenario. A real underwriting builds the NOI from the rent roll and the T-12 and runs this for every year of the hold, including the year amortization starts. Altyst reads the documents and does all of it.

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