Same-Store NOI

Same-Store NOI

The canonical skill for analyzing property-level NOI performance on a same-store basis. Any command that needs NOI trend analysis, occupancy bridges, or revenue/expense decomposition MUST invoke this skill.

Trigger Conditions

Activated when any command needs:

• Same-store NOI comparison (period over period)
• Occupancy bridge (beginning -> changes -> ending)
• Revenue decomposition (base rent, reimbursements, other income)
• Expense decomposition (controllable vs. uncontrollable)
• NOI variance analysis vs. budget or prior year

Business Context

Same-store NOI growth is the primary measure of organic operating performance in real estate. By comparing a consistent pool of assets across periods, it strips out the noise of acquisitions, dispositions, and development completions to reveal true operational trends. This metric is reported by REITs, open-end funds, and institutional managers as a key performance indicator.

Same-Store Criteria

A property qualifies as same-store when it meets ALL of the following:

1. Owned in both comparison periods (beginning and end)
2. Not in active development during either period
3. Not in initial lease-up (typically: must have reached stabilized occupancy, usually >80%, prior to the beginning of the comparison period)
4. Not undergoing major renovation that materially disrupts operations

Properties failing these criteria are classified as "non-same-store" and reported separately.

Workflow

Revenue Decomposition

1. Break total revenue into: base rent, expense reimbursements (CAM/tax/insurance), percentage rent, parking, other income
2. Compare each component period-over-period
3. Identify drivers: rate increases, occupancy changes, reimbursement timing, one-time items

Expense Decomposition

1. Classify expenses as controllable (R&M, utilities, G&A, payroll) vs. uncontrollable (real estate taxes, insurance)
2. Compare each line item period-over-period
3. Calculate expense ratio (OpEx / EGI) and compare to prior period

NOI Calculation

1. NOI = Effective Gross Income - Operating Expenses
2. Same-store NOI growth = (current NOI - prior NOI) / prior NOI
3. Decompose NOI change into: revenue-driven vs. expense-driven

Occupancy Bridge

1. Beginning occupancy (prior period end)
2. • New leases / lease-up (SF and count)
3. • Move-outs / expirations (SF and count)
4. +/- Other adjustments (remeasurements, conversions)
5. = Ending occupancy
6. Report both physical (SF-based) and economic (revenue-based) occupancy

Output Structure

• Same-store NOI summary (current vs. prior, dollar and % change)
• Revenue waterfall (component-level comparison)
• Expense waterfall (component-level comparison)
• Occupancy bridge (beginning -> changes -> ending)
• Key driver narrative (top 3 factors affecting NOI change)

QA Checks

• Same-store pool consistently defined across periods
• Revenue components sum to total revenue
• Expense components sum to total expenses
• NOI = Revenue - Expenses (arithmetic tie)
• Occupancy bridge ties (beginning +/- changes = ending)
• Physical and economic occupancy both reported
• Non-same-store assets identified and excluded with rationale

Edge Cases

• Partial-period ownership: Exclude from same-store; report separately with annualized run-rate
• Major lease event: If a single tenant represents >25% of revenue and vacates, flag as distorting same-store comparison
• Expense reclass: If chart of accounts changed between periods, restate prior period to match current classification before comparing
• Tax reassessment: Large tax increases are uncontrollable but can dominate NOI variance -- call out separately