LTV, or loan-to-value ratio, is one of the most important metrics in commercial real estate. It is used to compare the amount of a loan to the current estimated market value of a commercial or multifamily property.
What is Debt Yield?
Debt yield is a commercial real estate metric used by lenders to determine how long it would take them to get back their investment if the borrower defaulted on their loan and they had to foreclose on the property. Debt yield is calculated by dividing a property’s net operating income (NOI) by the total loan amount.