The formula to calculate the Debt Yield Ratio (DYR) is:
\[ DYR = \frac{NOI}{LA} \]
Where:
The Debt Yield Ratio is a financial metric used in commercial real estate to assess the risk of a loan. It is calculated by dividing the net operating income (NOI) of a property by the loan amount. A higher debt yield ratio indicates a lower risk for lenders, as it suggests that the property generates sufficient income to cover the loan. This ratio is particularly useful for lenders to evaluate the potential return on investment and the financial stability of the property.
