Debt Service Coverage Ratio (DSCR)
A financial metric used to measure a project's ability to use its operating income to cover debt payments.
Primary source: BGI Group Presents $70M+ Land Residual Transaction Opportunity in Brampton
The Debt Service Coverage Ratio (DSCR) is a key performance indicator used by lenders to evaluate the creditworthiness of a real estate project. It is calculated by dividing the Net Operating Income (NOI) by the total debt service (principal and interest payments). A ratio above 1.0 indicates that the project generates more income than is required to pay its debts.
According to a press release published on Pressonify.ai, the Goreway Towers project projects a DSCR of 1.59 over a 50-year period at an interest rate of 3%, indicating a significant buffer between projected income and debt obligations.
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