Definition: The ratio of net operating income over the annual mortgage payment, where the calculated net cash flow includes reserves for the projected costs of tenant improvements and leasing commissions (TI/LC costs). This threshold is utilized to analyze projected annual cash flow deficiencies resulting from TI & LC expenditures over the loan term. Generally, a minimum threshold margin of 1.lOx is desired. Lenders use this ratio to assist them in determining the likelihood of a negative cash flow event as a result of TI & LC costs during the term of the loan. See also TI/LC.