A related page on this site treats yield on cost, the return against everything a project consumes. This page treats the simpler pair that headlines most deal summaries: the going-in cap, today's income over price, and the stabilized cap, the claimed future income over the same price. The spread between them is the deal's business plan compressed into a single number, and like most compressions, it hides exactly the things that decide whether the plan is real.
The first thing it hides is the definition doing all the work. Stabilized is one of the most abused words in this industry, and the abuse follows a pattern: market rents on every vacant suite, every expiring lease renewed at a healthy bump, every concession forgotten, full occupancy as the resting state. A stabilized number is only as honest as its ingredients, and the ingredients are checkable: which specific suites lease, at what specific rents, by what specific dates, with which existing tenants actually staying. A stabilized NOI that cannot answer those questions suite by suite is not a projection. It is the asking price expressed as a yield.
The second thing the spread hides is time, and time is not free. Between here and stabilized sit months of foregone income, the capital that gets the suites filled, and the carry on both. Two deals showing the identical stabilized cap are very different purchases if one arrives in ten months and the other in thirty, and the summary pair contains no trace of the difference. The wait has a price. It just never appears next to the number it discounts.
The widget below makes the pair and the wait visible together: price, as-is NOI, stabilized NOI, months to get there, and it returns both caps plus a plain accounting of what the bridge period forgoes. It is deliberately crude about the path, assuming a straight line from here to there, and real lease-up is never a straight line, which is part of the lesson rather than a footnote to it.
Because the honest version of this analysis is a schedule, not a spread. Which leases roll when, which vacant suites fill in which months, what the TI and downtime cost as they do, what coverage looks like during the soft middle. That schedule is what PropCalc™ actually models, per tenant, through the hold, so the stabilized number stops being a claim and becomes an output, assembled from lease-level assumptions someone can inspect and challenge. The spread between the two caps tells you what the seller says the plan is worth. The schedule tells you whether to believe them.