Asset performance is not the same as yield

Yield language belongs to people who price the building. Asset performance, in the sense we write it, is whether the building is doing the work the owner asked of it: collecting the rent that is due, keeping plant in a state that does not empty the upper floors, and not letting a vacant retail unit poison the stair.

A holding can show timely residential rent and still perform badly if the boiler fails every winter and two shops have been dark since the previous Easter. The asset performance brief for one building therefore sets the rent roll beside condition notes. It will not produce a cap rate.

Owners sometimes ask us to fold both into one occupancy percentage. We will not. Occupancy is a count of space. Performance is a short account of whether that space, and the common parts, are doing their job.

Back to field notes