What is stabilized NOI?

Stabilized NOI is a forward looking estimate of what the 'steady state' NOI of the property will be.

Stabilized Net Operating Income (NOI) is when the properties income and expenses are projected to be the ongoing state of the asset after planned changes.

For example, a property may have major renovations as part of a value-add business plan. In that case, there may have been lower occupancy in the property for some time as improvements are made, so the current revenue would be lower with higher expenses being incurred.

However, by looking at historical patterns, rental forecasts and other similar properties - we can project what income that property should be generating and what the expected expenses would be needed to be incurred to generate that income in future.

Using the stabilized NOI provides a more accurate reflection of the 'steady-state' profitability of the property.