Debt Service Coverage Ratio (DSCR) Expectations
Algonquian Real Estate, LLC evaluates all acquisitions using conservative debt service coverage standards consistent with community and regional bank underwriting practices.
Baseline Target
- Minimum target DSCR: 1.25x under stabilized assumptions
- Preferred range: 1.25x–1.35x depending on leverage and asset profile
Underwriting Methodology
- In-place rents or supportable market rents only
- Verified trailing income and expense review when available
- Realistic vacancy and collection assumptions
- Operating reserve allocation incorporated into evaluation
Risk Discipline
- No reliance on speculative rent increases
- No dependence on short-term appreciation assumptions
- Stress sensitivity considered for interest rate and expense variability
Acquisition structure does not alter DSCR discipline. All transactions must demonstrate durable coverage and long-term sustainability prior to closing.
