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    Office Building Income Proforma Calculator

    Underwrite an office tower or suburban office park: rent PSF, expense recoveries, NOI, value per SF, DSCR, and cash-on-cash return.

    Autosave on

    How to use this calculator

    1. Enter rentable square feet (RSF). Office leases are quoted on RSF, which includes a tenant's pro-rata share of common areas. Use this for value-per-SF math.
    2. Enter base rent and occupancy. Use the weighted-average base rent PSF/yr and the in-place physical occupancy.
    3. Add expense recoveries and parking income. Model expense pass-throughs (over a base year stop) as recovery PSF, and add annual parking & other income.
    4. Tune OpEx and pick a cap rate. Adjust operating expenses, then enter a market cap rate appropriate for your asset class (Class A, B, suburban, medical).
    5. (Optional) Add financing. Open Financing & returns for LTV, interest, and amortization to get DSCR and cash-on-cash.

    Tips

    • Office lenders are currently capping LTV at 50–55% on most deals; DSCR target is 1.30×–1.40×.
    • Urban parking can be 10–20% of total revenue and is often the swing factor on a deal.
    • Medical office and life science still trade tighter than traditional office.

    Income

    $
    %
    $
    Stop / pass-through
    $
    Annual
    %
    Base rent
    $2,543,200
    Recoveries
    $336,600
    Total income PSF
    $38.50

    Operating expenses (annual)

    $
    $
    $
    %
    % of EGI
    $
    $
    $

    Valuation

    %
    Value = NOI ÷ cap rate
    %
    Loan = value × LTV
    $
    Optional — overrides LTV when > 0
    %
    yrs
    Export this proforma
    Save your inputs and results as PDF, Excel, CSV, or JSON.
    Net operating income (NOI)
    $1,779,654
    Expense ratio 37.7%
    Estimated value
    $22,245,671
    @ 8% cap
    Effective gross income
    $2,856,344
    Vacancy loss $203,456
    Value per SF
    $261.71
    85,000 SF
    Annual debt service
    $1,061,235
    $88,436 / mo
    DSCR
    1.68
    Lenders typically want ≥ 1.25
    Cash flow (after debt)
    $718,418
    Cash-on-cash return
    7.18%
    On $10,010,552 equity

    DSCR analysis

    Strong

    Comfortable agency / CMBS coverage. Room for vacancy or rate stress without breaching covenants.

    1.68x
    $1,779,654 NOI ÷ $1,061,235 debt
    What's driving this DSCR
    • Debt service+11.1%
      Cut loan 10% (~$1,223,512 less debt) → 1.86x DSCR.
    • NOI+10.0%
      Each 10% NOI lift → +$177,965/yr → 1.84x DSCR.
    • Interest rate+9.6%
      Drop rate 100 bps to 6.25% → 1.84x DSCR.
    • Amortization+6.0%
      Extend to 30 years → 1.78x DSCR.
    Impact = % DSCR change if that input alone moved to a friendlier level (NOI +10%, rate −100 bps, amort +5 yrs, loan −10%).

    Proforma summary

    Gross potential income$2,543,200
    Less: vacancy & credit loss($203,456)
    Plus: other income$516,600
    Effective gross income$2,856,344
    Less: management fee($85,690)
    Less: other operating expenses($991,000)
    Net operating income$1,779,654
    ÷ Cap rate8%
    Estimated property value$22,245,671

    Built for office brokers, appraisers, and investors. Underwrite Class A towers, suburban office parks, or medical office by RSF, base rent, expense recoveries (over a base year stop), and parking income — all the way through NOI, value, and lender DSCR.

    Office valuation drivers

    Office buildings are valued by NOI ÷ cap rate, with rent PSF and occupancy as the two most-watched inputs. Walk-up Class B properties below 80% occupied trade at meaningful discounts to stabilized assets — model lease-up costs (TI/LC) separately when underwriting value-add deals.

    Parking and other income

    Urban office parking income can be 10–20% of total revenue and is often the swing factor between a marginal deal and a strong one. Suburban garden office typically has minimal parking income (free surface lots).

    Tenant improvements, leasing commissions, and rollover risk

    Every new lease or renewal carries upfront costs: tenant improvements (TI) at $30–$80 PSF for Class A product, and leasing commissions (LC) of 4–6% of gross rent. Amortize these over the lease term when underwriting — a 5-year lease with $50 PSF in TI needs $10 PSF/yr added to effective rent to reflect true occupancy cost. Value-add office deals often trade at higher cap rates because the buyer knows they'll fund TI/LC for the first 12–24 months before stabilization. Rollover concentration risk is equally important: if 40% of rent rolls in the same year, stress-test a 6–9 month lease-up vacancy and the associated capital costs.

    Frequently asked questions

    What's the difference between RSF and USF?

    Rentable square feet (RSF) includes a tenant's pro-rata share of common areas (lobbies, corridors, restrooms). Usable square feet (USF) is the actual occupied space. Office leases are quoted on RSF — use that here.

    What is an expense stop?

    On a modified gross lease the landlord pays operating expenses up to a base-year amount; the tenant reimburses any increase. Model that reimbursement as the expense recovery PSF input.

    Why are office cap rates elevated right now?

    Post-pandemic remote work has compressed office demand and pushed cap rates 150–300 bps higher than 2019, especially for Class B/C suburban product. Medical office and life science remain tighter.

    What DSCR do office lenders want?

    Currently 1.30x–1.40x for stabilized office, with hard cash management and reserves. Many lenders cap LTV at 50–55% on office until the sector restabilizes.

    By Larius — software engineer, NC real estate broker & CRE/business appraiserReviewed by the Handy Calculators editorial teamHow we build calculators
    Before you act on this result

    This calculator is general education, not advice. Before you sign, file, offer, or fund anything, walk through this quick checklist:

    • Confirm every input (price, rate, taxes, insurance, HOA, fees) against a real document — a Loan Estimate, purchase contract, tax bill, or HOA statement — not a guess.
    • Verify the local rules where the property sits: closing customs, transfer taxes, disclosure requirements, and title practices differ by state and county.
    • Talk to a licensed professional in that jurisdiction — a local real estate broker, closing attorney or title company, CPA, state-licensed appraiser, or mortgage loan officer.
    • Remember Larius is licensed as a real estate broker in North Carolina only. Anything outside NC needs a locally licensed pro.
    • Get material assumptions in writing (rate lock, insurance quote, tax cap, rent comps) before you commit money or sign.

    Read our Editorial FAQ for the full education-vs-advice breakdown, or let us know if a number here looks wrong.

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