Stabilized Yield
Stabilized yield is the expected cap rate or net yield once a property reaches normal occupancy and operating performance, used for valuation and underwriting.
| Stabilization Criteria | Requirement |
| Occupancy level | 90% to 95% for residential |
| Rent levels | At or near market rates |
| Operating expenses | Normalized run-rate, not startup |
| Tenant mix | Creditworthy, diversified tenants |
| Timeframe | Typically 12 to 24 months after acquisition |
| Yield Comparison | Rate |
| Current yield (year 1) | 3.8% (lease-up phase) |
| Stabilized yield (year 2) | 5.2% (normal operations) |
| Valuation basis | Use stabilized, not current |
| Exit yield assumption | Typically equals or exceeds stabilized |
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