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Glossary of real estate terms and FAQs
Find answers to some of the most common questions about commercial real estate investing.
What is a 1031 Exchange?
What distinguishes Class A, Class B, and Class C office space?
How can I view current properties on the market?
Accrual rate
Accrued interest
Adjustable rate loan
Adjustable Rate Mortgage (ARM)
ADR
Amortization
ARM
Availability rate
Available space
Average Daily Rate (ADR)
Average life
“B” pieces
Bankruptcy Remote Entity (BRE)
Bucket
Build-to-suit
Bullet mortgage
Buyer
Call protection
Capital markets
Capitalization rate (Cap rate)
Cash flow
Cash-on-cash return
CBD
Central Business District (CBD)
CMBS
Comfort Letter
Commercial Mortgage-Backed Security (CMBS)
Concessions
Conduit
Construction starts
Contiguous blocks of space
Controlling party
Co-tenancy provisions
Corporate guaranty
Credit facility loan
Credit tenant lease
Cross-collateralization
Cross-default
Cured
Dark space
Debt service
Debt Service Coverage Ratio (DSCR)
Default
Defeasance
Deferred interest
Deferred maintenance account
Delinquency
Deliveries
Delivery date
Developer
Direct space
Discount rate
Disposition fee
DSCR
Due Diligence
Earn-out loans
Environmental risk
Equity kicker
Equity yield rate
Escrow account
Existing inventory
Expense ratio
Expense stops
Extension/Extension option
Extension risk
Fannie Mae (Federal National Mortgage Association/FNMA)
Federal Deposit Insurance Corporation (FDIC)
Federal Housing Administration (FHA)
First loss piece
Flex building
Foreclosure
Franchise fee
Freddie Mac (Federal Home Loan Mortgage Corporation – FHLMC)
Full-service lease
Full-service rental rate
Ginnie Mae (Government National Mortgage Association – GNMA)
Go dark provisions
Going-in cap rate
Government Sponsored Enterprise (GSE)
Gross full-service lease
Gross absorption
Ground lease
Growth in inventory
GSE
Haircut
Hurdle rate
Hyper-amortization
Impound account
Independent director
Industrial property
Institutional property
Interest Only Strip (IO)
Interest rate cap
Interest shortfall
Interest rate cap
Interpolated treasury
Investment Grade (IG)
Issuer guarantee
Landlord rep
Leased space
Lease assignment
Leasing commissions
Leasehold improvements
Leasing activity
Letter of Credit (LOC)
LIBOR
LIHTC
Liquidation
Liquidity
LOC
Loan-to-Value Ratio (LTV)
Lock-box provision
Lock-out period
London Interbank Offered Rate (LIBOR)
Loss to lease
Low Income Housing Tax Credit
LTV
Market-to-market
Market
Master servicer
Master servicing fee
Mezzanine Debt
Modeling (Cash flow modeling)
(Multifamily property)
Multi-tenant
NCF
NCREIF Index
Negative amortization
Net absorption
Net effective rent
Net cash flow (NCF)
Net Operating Income (NOI)
Net rental rate
NOD
Non-consolidation opinion
NNN lease
Non-performing loan
Notice of Default (NOD)
NOI
Occupied space
Office property
Open prepayment
Other Real Estate Owned (OREO)
Overcollateralization
Owner
Pari passu loan
Pay rate
Percentage lease
Phase I Environmental Site Assessment (ESA)
Planned/Proposed
PML
Pooling and Servicing Agreement (PSA)
Preleased space
Prepayment
Prepayment premium or Prepayment penalty
Prepayment risk
Price/sf
Primary market
Private label securities
Private placement
Probable Maximum Loss (PML)
Property manager
PSA
Rating agency
Real Estate Investment Trust (REIT)
Real Estate Mortgage Investment Conduit (REMIC)
Real Estate Owned (REO)
Realized loss
Recapture provisions
Refinance rate
Refinance risk
Region
REIT
Release provision
Relet/Re-lease space
REMIC
Rent step-up
Rentable Building Area (RBA)
Rental rates
REO
Replacement reserve account
Reps and warranties
Reserve funds
Residual
Retail property
Revenue Per Available Room (RevPAR)
Reversionary cap rate
Reversion/Reversionary value
Right to cure
Rollover
Sales price
Sales volume
Seasoning
SEC
Secondary market
Securities
Securities and Exchange Commission
Securitization
Self-amortizing loans
Seller
Senior pieces
Senior/subordinate structure
Servicer
Shadow anchor retail
Single-tenant
SPC
SPE
Special Purpose Entity (SPE)
Special servicer
Special servicing fee
Stress test
Structuring
Sublease space
Submarkets
Subordinate ground lease
Subordinate lien
Subordination
Suburban
Sub-performing loan
Sub-servicer
Swap
Tenancy
Tenant concessions
Tenant Improvements (TI)
TI
Tenant rep
Time on market
Tranche
Triple-net lease
Trustee
Under construction
Unit mix
Vacancy rate
Vacant space
Value
Waterfall
Weighted average rental rate
Workout fee
Year built
Yield maintenance
Yield spread
Yield to maturity
YTD