6min chapter

We Study Billionaires - The Investor’s Podcast Network cover image

TIP537: The Surprising Opportunities in Commercial Real Estate w/ Ian Formigle

We Study Billionaires - The Investor’s Podcast Network

CHAPTER

Debt Service Coverage Ratios

The answer to that question really varies widely depending upon who you ask, especially in the current market environment. The ratio is net operating income divided by the total amount of debt service payments on an annual basis. I'll run through major asset classes and provide some context. In order of lowest to highest debt service coverage ratios that we see as typically required by lenders on stabilized assets,. When you get to unstabilized assets, there's so many things that factor into the equation that it becomes very difficult to talk about broad numbers.

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