LTV (Loan-to-Value)

LTV is the leverage measure that determines how much of the property is financed by debt versus equity. Lower LTV = more equity, less leverage, lower returns but lower risk. Higher LTV = thinner equity, higher returns but more risk and more covenant exposure.

For coliving specifically, senior debt LTV is typically 55-70% reflecting the asset class's relative novelty and operating complexity. Traditional multifamily often gets 70-80% senior LTV; coliving's premium is the operator-execution risk component.

The LTV-DSCR tension matters most. Banks typically size loans to whichever constraint is tighter, LTV ceiling OR DSCR floor. Coliving in particular often hits the DSCR ceiling first because of lease-up risk: a property might support 65% LTV by valuation but only 55% LTV by debt service coverage on a conservative trailing-12-month NOI. The result: banks frequently offer headline 65% LTV terms that collapse to 55% effective LTV after underwriting. Equity sponsors need to model both constraints and budget for the lower. Hybrid debt structures (senior + mezzanine) push effective LTV to 75-85% but stack rates that compress operator returns; common in mature European markets, rare in emerging coliving markets where mezz lenders haven't fully developed the asset class.