What is a replacement reserve?

[Gabe Goudreau]

Hello everyone, 

I am analyzing multifamily deals using a modified spreadsheet I found online, and the spreadsheet has a reserve account that is taken directly out of of the NOI called "Replacement Reserve". It is taken directly out from the projected NOI, and replacement reserve account + debt service is what's subtracted from the NOI to find net cash flow. What is the function of this replacement reserve account? Thanks.