Glossary

Run-Rate NOI

Also known as: Annualized Run-Rate, Run-Rate

An annualized projection of net operating income derived by extrapolating a recent period's actual results — typically the most recent one, three, or six months — forward across a full twelve months, used as a quick, current-state read on ongoing performance.

Run-rate NOI is distinct from trailing-twelve-month NOI, which looks backward over an actual completed twelve-month window, and from forward NOI, a full underwritten projection incorporating known future lease events; run-rate is simply a mechanical annualization of a recent snapshot and can be distorted by seasonality, one-time items, or a recent rent-roll change that has not yet fully seasoned. It is commonly used as a health check between formal reforecast cycles, in lender covenant monitoring, and in marketing materials during a sale process to show where a property stands today relative to its trailing average. A short-window run-rate on an asset that just completed a renovation-driven lease-up is a classic trap — annualizing a temporarily elevated occupancy month, or an unusually low-expense month, can materially overstate sustainable NOI, so any run-rate figure should always be read together with the period it was calculated from.