The four tests a lender runs, and the order they run them in
Most borrowers check debt service coverage and stop. A lender checks four things, and each one can fail on its own — usually the one you did not look at.
They are not the same test
Debt service coverage asks whether this year's income covers this year's payment. Debt yield asks what the income is worth against the loan regardless of rate or term. Loan-to-value asks what happens if the building is worth less. Break-even occupancy asks how empty it can get before the payment stops being made.
A deal can clear coverage comfortably and fail debt yield, because coverage improves with a longer amortization and debt yield does not care about the loan's shape at all.
Why debt yield exists
Debt yield is NOI divided by the loan amount. No rate, no term, no amortization. That is the point: it is the one ratio a borrower cannot improve by restructuring the debt.
Stretch the amortization from twenty-five years to thirty and coverage improves. Debt yield does not move. Lenders added it after cycles where coverage looked fine on loans that were simply structured to make it look fine.
Break-even is not a ratio, it is a cushion
Break-even occupancy is the share of the building that has to be leased for income to cover operating expenses and debt service. It answers a different question: not "does this work" but "how much room is there before it stops working".
It also does not apply to every building. On a single-tenant property there is no meaningful break-even occupancy — the building is either fully let or empty, and the cushion is a covenant rather than a percentage.
Run all four, then look at what is closest
The binding constraint is rarely the one you expect, and it moves with rates. In a low-rate market coverage clears easily and LTV binds. When rates rise, coverage binds first and the loan gets sized down to fit it.
Sizing to the tightest of the four is what a lender does. Doing it yourself first is the difference between negotiating and being told.