Stabilized NOI is the NOI a multifamily property produces at its steady-state operating profile — not during lease-up, not with value-add improvements in progress. The benchmark for valuation.
During lease-up or renovation periods, current NOI often understates future stabilized potential. Stabilized NOI represents what the property produces with occupancy at submarket norms, rents at achievable levels, and operating costs at normal rates.
For LA multifamily 2026, stabilized NOI is the basis for cap rate pricing on core deals. Value-add deals trade based on current NOI with the stabilized underwriting informing the thesis. Sellers should distinguish between current NOI and stabilized NOI during listing presentation.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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