In development modeling, Net Potential Rent (NPR) denotes:

In development modeling, Net Potential Rent (NPR) denotes:

• A. Potential rent if the property were fully leased and performing as planned
• B. Net Operating Income after expenses
• C. Cash flow before debt service
• D. Actual rents collected after vacancies

Answer: (A)

Net Potential Rent is the rent the project would generate if it were fully leased at planned or market rents and performed as expected, with no vacancies or credit losses and before operating expenses. This baseline revenue helps you gauge upside and compare against other income measures. That’s why the correct choice is the one that describes potential rent under full occupancy and performance. It is not NOI (which subtracts operating expenses), not cash flow before debt service (which involves financing costs), and not actual rents collected after vacancies (which reflect vacancies and credit losses). For example, if full occupancy at the planned rents would yield $200,000 annually, that $200,000 represents Net Potential Rent.

Net Potential Rent is the rent the project would generate if it were fully leased at planned or market rents and performed as expected, with no vacancies or credit losses and before operating expenses. This baseline revenue helps you gauge upside and compare against other income measures.

That’s why the correct choice is the one that describes potential rent under full occupancy and performance. It is not NOI (which subtracts operating expenses), not cash flow before debt service (which involves financing costs), and not actual rents collected after vacancies (which reflect vacancies and credit losses). For example, if full occupancy at the planned rents would yield $200,000 annually, that $200,000 represents Net Potential Rent.