NOI (Net Operating Income)

NOI, or net operating income, is the revenue a data center property generates from rent, power and cross-connect fees minus its operating expenses — utilities, maintenance, property management and insurance — before debt service, taxes, depreciation or capital expenditure are deducted. It is the numerator investors divide by purchase price or market value to compute a cap rate, and the figure lenders and buyers scrutinize most closely when underwriting a colocation acquisition or refinancing, since it strips out financing structure to show what the asset itself earns. For a stabilized, fully leased wholesale facility, NOI margins can run 60-70% of revenue once a long-term customer is in place and power costs are passed through under the lease; a newly built or partially leased site carries much thinner or even negative NOI until occupancy ramps. Rising power and cooling costs from denser AI racks put pressure on NOI unless operators pass those costs through via triple-net or power-indexed lease structures.