Abatement: Often referred to as free rent or early occupancy and may occur outside or in addition to the primary term of the lease

Above building standard: Upgraded finishes and specialized designs necessary to accommodate a tenant's requirements

Absorption rate: The rate at which rentable space is filled. Gross absorption is a measure of the total square feet leased over a specified period with no consideration given to space vacated in the same geographic area during the same time period. Net absorption is equal to the amount occupied at the end of a period minus the amount occupied at the beginning of a period and takes into consideration space vacated during the period.

Ad valorem: Meaning "according to value," this is a tax imposed on the value of property that is typically based on the local government's valuation of the property.

Advances: Payments made by the servicer when the borrower fails to make a payment

Adviser: A broker, consultant or investment banker who represents an owner in a transaction. Advisers may be paid a retainer and/or a performance fee upon the close of a financing or sales transaction.

Aggregation risk: Risk associated with warehousing mortgages during the pooling process for future securitization

Alternative or specialty investments: Property types that are not considered conventional institutional-grade real estate investments. Examples include congregate care facilities, self-storage facilities, mobile homes, timber, agriculture and parking lots.

Amortization: The liquidation of a financial debt through regular periodic installment payments. For tax purposes, the periodic deduction of capitalized expenses such as organization costs

Annual percentage rate (APR): The actual cost of borrowing money. It may be higher than the note rate because it represents full disclosure of the interest rate, loan origination fees, loan discount points and other credit costs paid to the lender.

Appraisal: An estimate of a property's fair market value that is typically based on replacement cost, discounted cash flow analysis and/or comparable sales price

Appreciation: An increase in the value or price of an asset

Appreciation return: The portion of the total return generated by the change in the value of the real estate assets during the current quarter, as measured by both appraisals and sales of assets

As-is condition: The acceptance by the buyer of the existing condition of the premises at the time of sale.

Assessment: A fee imposed on property, usually to pay for public improvements such as water, sewers, streets, improvement districts, etc.

Assignment: A transfer of the lessee's entire stake in the property. It is distinguishable from a sublease where the sublessee acquires something less than the lessee's entire interest.

Average common equity: Calculated by adding the common equity for the five most recent quarters and dividing by five

Average downtime: Expressed in months, the amount of time expected between the expiration of a lease and the commencement of a replacement lease under current market conditions

Average free rent: Expressed in months, the rent abatement concession expected to be granted to a tenant as part of a lease incentive under current market conditions

Average occupancy: The average occupancy rate of each of the preceding 12 months

Average total assets: Calculated by adding the total assets of a company for the five most recent quarters and dividing by five

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Balloon, or bullet, loan: A loan with a maturity that is shorter than the amortization period

Balloon risk: The risk that a borrower will not be able to make a balloon (lump sum) payment at maturity due to a lack of funding

Bankrupt: The state of an entity that is unable to repay its debts as they become due

Bankruptcy: Proceedings under federal statutes to relieve a debtor who is unable or unwilling to pay its debts. After addressing certain priorities and exemptions, the bankrupt entity's property and other assets are distributed by the court to creditors as full satisfaction for the debt.

Base principal balance: The original mortgage amount adjusted for subsequent fundings and principal payments without regard to accrued interest or other unpaid debt

Base rent: A set amount used as a minimum rent with provisions for increasing the rent over the term of the lease

Base year: Actual taxes and operating expenses for a specified year, most often the year in which a lease commences

Basis point: 1/100 of 1 percent

Below-grade: Any structure or portion of a structure located underground or below the surface grade of the surrounding land

Beneficiary: An employee covered by an employee benefit plan

Beta: A measure of a company's common stock price volatility relative to the market

Bid: An offer, stated as a price or spread, to buy whole loans or securities

Book value: Also referred to as common shareholder's equity, this is the total shareholder's equity as of the most recent quarterly balance sheet minus preferred stock and redeemable preferred stock.

Broker: A person who acts as an intermediary between two or more parties in connection with a transaction

Buildable acres: The area of land that is available to be built on after subtracting for roads, setbacks, anticipated open spaces and areas unsuitable for construction

Building code: The various laws set forth by the ruling municipality as to the end use of a certain piece of property. They dictate the criteria for design, materials and types of improvements allowed.

Build-to-suit: A method of leasing property whereby the developer/landlord builds to a tenant's specifications

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Call date: Periodic or continuous rights given to the lender to cause payment of the total principal balance prior to the maturity date

Capital appreciation: The change in market value of a property or portfolio adjusted for capital improvements and partial sales

Capital expenditures: Investment of cash or the creation of a liability to acquire or improve an asset, as distinguished from cash outflows for expense items that are considered part of normal operations

Capital gain: The amount by which the net proceeds from the sale of a capital item exceeds the book value of the asset

Capital improvements: Expenditures that arrest deterioration of property or add new improvements and appreciably prolong its life

Capital markets: Public and private markets where businesses or individuals can raise or borrow capital

Capitalization: The total dollar value of various securities issued by a company

Capitalization rate: The rate at which net operating income is discounted to determine the value of a property. It is the net operating income divided by the sales price or value of a property expressed as a percentage.

Carrying charges: Costs incidental to property ownership that must be absorbed by the landlord during the initial lease-up of a building and thereafter during periods of vacancy

Cash flow: The revenue remaining after all cash expenses are paid

Cash-on-cash yield: The relationship, expressed as a percentage, between the net cash flow of a property and the average amount of invested capital during an operating year

Certificate of occupancy: A document presented by a local government agency or building department certifying that a building and/or the leased area has been satisfactorily inspected and is in a condition suitable for occupancy

Chapter 7: That portion of the federal bankruptcy code that deals with business liquidations

Chapter 11: That portion of the federal bankruptcy code that deals with business reorganizations

Class "A": A real estate rating generally assigned to properties that will generate the highest rents per square foot due to their high quality and/or superior location

Class "B": Good assets that most tenants would find desirable but lack attributes that would permit owners to charge top dollar

Class "C": Buildings that offer few amenities but are otherwise in physically acceptable condition and provide cost-effective space to tenants who are not particularly image-conscious

Clear-span facility: A building, most often a warehouse or parking garage, with vertical columns on the outside edges of the structure and a clear span between columns

Closed-end fund: A commingled fund that has a targeted range of investor capital and a finite life

Closing: A period of time after a registration statement is effective and the offering commences, giving the underwriters time to receive payment for the securities

CMBS (commercial mortgage-backed securities): Securities backed by loans on commercial real estate

CMO (collateralized mortgage obligation): Debt obligations that are collateralized by and have payments linked to a pool of mortgages

Co-investment: Co-investment occurs when two or more pension funds or groups of funds share ownership of a real estate investment. In co-investment vehicles, relative ownership is always based on the amount of capital contributed. It also refers to an arrangement in which an investment manager or adviser co-invests its own capital alongside the investor.

Co-investment program: An investment partnership or insurance company separate account that enables two or more pension funds to co-invest their capital in a single property or portfolio of properties. The primary appeal for investors is to achieve greater diversification or invest in larger properties typically outside the reach of small- to mid-sized tax-exempt funds, with a greater measure of control than is afforded in typical commingled fund offerings.

Collateral: Asset(s) pledged to a lender to secure repayment of a loan in case of default

Common area: For lease purposes, the areas of a building and its site that are available for the non-exclusive use of all its tenants, e.g., lobbies, corridors, etc.

Comparables: Used to determine the fair market lease rate or asking price, based on other properties with similar characteristics

Concessions: Cash or cash equivalents expended by the landlord in the form of rental abatement to influence or persuade a tenant to sign a lease

Condemnation: The process of taking private property, without the consent of the owner, by a governmental agency for public use through the power of eminent domain

Construction loan: Interim financing during the developmental phase of a property

Consultant: Any company or individual that provides the following services to institutional investors: definition of real estate investment policy; adviser/manager recommendations; analysis of existing real estate portfolios; monitoring of and reporting on property asset. Consultants are distinguished from investment advisers or investment managers in that a consultant does not source or execute transactions and does not directly manage assets.

Consumer price index (CPI): Measures inflation in relation to the change in the price of goods and services purchased by a specified population during a base period of time.

Contract documents: The complete set of design plans and specifications for the construction of a building

Contract rent: The rental obligation, expressed in dollars, as specified in a lease. Also known as face rent.

Convertible debt: A mortgage position that gives the lender the option to convert to a partial or full ownership position in a property within a specified time period

Conveyance: Most commonly refers to the transfer of title to property between parties by deed. The term may also include most of the instruments with which an interest in real estate is created, mortgaged or assigned.

Core properties: The major property types - specifically office, retail, industrial and multifamily. Core assets tend to be built within the past five years or recently renovated.

Cost-approach improvement value: The current cost to construct a reproduction of, or replacement for, the existing structure less an estimate for accrued depreciation

Cost-approach land value: The estimated value of the fee simple interest in the land as if vacant and available for development to its highest and best use

Cost-of-sale percentage: An estimate of the costs to sell an investment representing brokerage commissions, closing costs, fees and other necessary disposition expenses

Coupon: The nominal interest rate charged to the borrower on a promissory note or mortgage

Covenant: A written agreement inserted into deeds or other legal instruments stipulating performance or non-performance of certain acts, or use or non-use of a property and/or land

Credit enhancement: The credit support needed in addition to the mortgage collateral to achieve a desired credit rating on mortgage-backed securities.

Cross-collateralization: A grouping of mortgages or properties that serves to jointly secure one debt obligation

Cross-defaulting: Allows the trustee to call all loans in a group into default when any single loan is in default

Current occupancy: The current leased portion of a building or property expressed as a percentage of its total area or units

Current yield: For CMBS, the coupon divided by the price

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Debt service: The outlay necessary to meet all interest and principal payments during a given period.

Dedicate: To appropriate private property to public ownership for a public use

Deed: A legal instrument transferring title to real property from the seller to the buyer upon the sale of such property

Deed in lieu of foreclosure: A deed given by an owner/borrower to a lender to satisfy a mortgage debt and avoid foreclosure

Deed of trust: An instrument used in place of a mortgage by which real property is transferred to a trustee to secure repayment of a debt

Default: The general failure to perform a legal or contractual duty or to discharge an obligation when due

Deferred maintenance account: An account a borrower is required to fund that provides for maintenance of a property

Deficiency judgment: Imposition of personal liability on a borrower for the unpaid balance of mortgage debt after a foreclosure has failed to yield the full amount of the debt

Depreciation: A decrease or loss in property value due to wear, age or other cause. In accounting, depreciation is a periodic allowance made for this real or implied loss.

Design/build: A system in which a single entity is responsible for both the design and construction

Discount rate: A yield rate used to convert future payments or receipts into present value

Distraint: The act of seizing personal property of a tenant in default based on the right and interest a landlord has in the property

Due diligence: Activities carried out by a prospective purchaser or mortgager of real property to confirm that the property is as represented by the seller and is not subject to environmental or other problems.

Due on sale: A covenant that makes a mortgage due if the property is sold before the maturity date

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Earnest money: The monetary advance of part of the purchase price to indicate the intention and ability of the buyer to carry out the contract

Easement: A right created by grant, reservation, agreement, prescription or necessary implication to use someone else's property

Economic feasibility: The feasibility of a building or project in terms of costs and revenue, with excess revenue establishing the degree of viability

Economic rent: The market rental value of a property at a given point in time

Effective date: The date on which a registration statement becomes effective and the sale of securities can commence

Effective gross income (EGI): The total income from a property generated by rents and other sources, less a vacancy factor estimated to be appropriate for the property.

Effective gross rent (EGR): The net rent generated, after adjusting for tenant improvements and other capital costs, lease commissions and other sales expenses

Effective rent: The actual rental rate to be achieved by the landlord after deducting the value of concessions from the base rental rate paid by a tenant, usually expressed as an average rate over the term of the lease

Eminent domain: A power to acquire by condemnation private property for public use in return for just compensation

Encroachment: The intrusion of a structure that extends, without permission, over a property line, easement boundary or building setback line

Encumbrance: A right to, or interest in, real property held by someone other than the owner that does not prevent the transfer of fee title

Environmental impact statement: Documents required by federal and state laws to accompany proposals for major projects and programs that will likely have an impact on the surrounding environment

Equity: The residual value of a property beyond mortgage or liability

ERISA (Employee Retirement Income Security Act): Legislation passed in 1974 and administered by the Department of Labor that controls the investment activities primarily of corporate and union pension plans. More public pension funds are adopting ERISA-like standards.

Escalation clause: A clause in a lease that provides for the rent to be increased to reflect changes in expenses paid by the landlord such as real estate taxes and operating costs

Escrow agreement: A written agreement made between an escrow agent and the parties to a contract setting forth the basic obligations of the parties, describing the money (or other things of value) to be deposited in escrow, and instructing the escrow agent concerning the disposition of the monies deposited

Estoppel certificate: A signed statement certifying that certain statements of fact are correct as of the date of the statement and can be relied upon by a third party, including a prospective lender or purchaser

Exclusive agency listing: A written agreement between a real estate broker and a property owner in which the owner promises to pay a fee or commission to the broker if specified real property is sold during the listing period

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Fair market value: The sale price at which a property would change hands between a willing buyer and willing seller.

Fannie Mae (FNMA): The Federal National Mortgage Association - A quasi-governmental corporation authorized to sell debentures in order to supplement private mortgage funds by buying and selling FHA (Federal Housing Administration) and VA (Veterans Affairs) loans at market prices.

Fee simple interest: When an owners owns all the rights in a real estate parcel

Finance charge: The amount paid for the privilege of deferring payment of goods or services purchased, including any charges payable by the purchaser as a condition of the loan

First mortgage: The senior mortgage that, by reason of its position, has priority over all junior encumbrances. The holder has a priority right to payment in the event of default.

First refusal right, or right of first refusal: A lease clause giving a tenant the first opportunity to buy a property or lease additional space in a property at the same price and on the same terms and conditions as those contained in a third-party offer that the owner has expressed a willingness to accept

Fixed costs: Costs that do not fluctuate in proportion to the level of sales or production

Fixed rate: An interest rate that remains constant over the term of the loan

Flat fee: A fee paid to an adviser or manager for managing a portfolio of real estate assets.

Floor area ratio (FAR): The ratio of the gross square footage of a building to the square footage of the land on which it is situated

Force majeure: A force that cannot be controlled by the parties to a contract and prevents them from complying with the provisions of the contract. This includes acts of God such as a flood or a hurricane, or acts of man such as a strike, fire or war.

Foreclosure: The process by which the trustee or servicer takes over a property from a borrower on behalf of the lender

Forward commitments: Usually used to describe a lender's obligation to fund a mortgage.

Freddie Mac (FHLMC): Federal Home Loan Mortgage Corp. - a corporation established by the Federal Home Loan Bank to issue mortgage-backed securities

Full recourse: A loan on which an endorser or guarantor is liable in the event of default by the borrower

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General contractor: The prime contractor who contracts for the construction of an entire building or project, rather than just a portion of the work. The general contractor hires subcontractors, coordinates all work and is responsible for payment to subcontractors.

General partner: A member of a partnership who has authority to bind the partnership and shares in the profits and losses of the partnership

Grant: To bestow or transfer an interest in real property by deed or other instrument

Grantee: One to whom a grant is made

Grantor: The person making the grant

Gross building area: The sum of areas at each floor level, including basements, mezzanines and penthouses included within the principal outside faces of the exterior walls and neglecting architectural setbacks or projections

Gross investment in real estate (historic cost): The total amount of equity and debt invested in real estate investments, including the gross purchase price, all acquisition fees and costs, plus subsequent capital improvements, less proceeds from sales and partial sales

Gross real estate asset value: The market value of the total real estate investments under management in a fund or individual accounts. It typically includes the total value of all equity positions, debt positions and joint venture ownership positions, including the amount of any mortgages or notes payable related to those assets.

Gross real estate investment value: The market value of real estate investments held in a portfolio without regard to debt, equal to the total of real estate investments as shown on a statement of assets and liabilities on a market-value basis

Gross returns: Returns generated from the operation of real estate without dilution for adviser or manager fees

Guaranty: Agreement whereby the guarantor assures satisfaction of the debt of another or performs the obligation of another if and when the debtor fails to do so

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Hard cost: The cost of actually constructing property improvements

Highest and best use: The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible and that results in the highest value

Holdbacks: A portion of a loan commitment that is not funded until an additional requirement is met, such as completion of construction

Holding period: The length of time an investor expects to own a property from purchase to sale

HVAC: The acronym for heating, ventilating and air conditioning

Hybrid debt: A mortgage position with equity-like participation features in both cash flow and the appreciation of the property at the time of sale or refinance

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Implied cap rate: Net operating income divided by the sum of a Real Estate Investment Trusts equity market capitalization and its total outstanding debt

Income capitalization value: The indication of value derived for an income-producing property by converting its anticipated benefits into property value through direct capitalization of expected income or by discounting the annual cash flows for the holding period at a specified yield rate

Income property: Real estate that is owned or operated to produce revenue

Income return: The percentage of the total return that is generated by the income from operations of a property, fund or account

Indirect costs: Development costs other than direct material and labor costs that are directly related to the construction of improvements, including administrative and office expenses, commissions, architectural, engineering and financing costs

Inflation: The annual rate at which consumer prices increase

Inflation hedge: An investment that tends to increase in value at a rate greater than inflation and helps contribute to the preservation of the purchasing power.

Institutional-grade property: Various types of real estate properties generally owned or financed by tax-exempt institutional investors. Core investments typically include office, retail, industrial and apartments. Specialty investments include hotels, congregate care facilities, land beneath existing improvements, vacant land, mixed-use properties (i.e., a property containing at least two property types) and mobile home parks.

Insurance company separate account: A real estate investment vehicle that may only be offered by life insurance companies.

Interest: The price paid for the use of capital

Interest-only strip: A derivative security consisting of all or part of the interest portion of the underlying loan or security

Internal rate of return (IRR): A discounted cash-flow analysis calculation used to determine the potential total return of a real estate asset during an anticipated holding period

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Joint venture: An investment entity formed by one or more entities to acquire or develop and manage real property and/or other assets

Just compensation: Compensation that is fair to both the owner and the public when property is taken for public use through condemnation (eminent domain)

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Leasehold interest: The right to hold or use property for a fixed period of time at a given price, without transfer of ownership

Legal description: A geographical description identifying a parcel by government survey, metes and bounds, or lot numbers of a recorded plat including a description of any portion that is subject to an easement or reservation

Legal owner: The legal owner has title to the property, although the title may actually carry no rights to the property other than as a lien.

Letter of credit: A commitment by a bank or other person that the issuer will honor drafts or other demands for payment upon full compliance with the conditions specified in the letter of credit. Letters of credit are often used in place of cash deposited with the landlord in satisfying the security deposit provisions of a lease.

Letter of intent: A preliminary agreement stating the proposed terms for a final contract

Lien: A claim or encumbrance against property used to secure a debt, a charge or the performance of some act

Lien waiver: Waiver of a mechanic's lien rights that is often required before the general contractor can receive a draw under the payment provisions of a construction contract. It may also be required before the owner can receive a draw on a construction loan.

Lifecycle: The various developmental stages of a property: pre-development, development, leasing, operating and redevelopment (or rehab)

Like-kind property: A term used in an exchange of property held for productive use in a trade or business or for investment.

Limited partnership: A type of partnership comprised of one or more general partners who manage the business and are personally liable for partnership debts, and one or more limited partners who contribute capital and share in profits but who take no part in running the business and incur no liability above the amount contributed

Liquidity: The ease with which assets can be converted to cash without loss in value

Listing agreement: An agreement between the owner of a property and a real estate broker giving the broker authorization to attempt to sell the property at a certain price and terms in return for a commission.

Loan-to-value ratio (LTV): The ratio of the value of the loan principal divided by the property's appraised value

Lockout: The period during which a loan may not be prepaid.

Long-term lease: In most markets, this refers to a lease whose term is at least three years from initial signing to the date of expiration or renewal.

Loss severity: The percentage of principal lost when a loan is foreclosed

Lot: Generally one of several contiguous parcels of land making up a fractional part or subdivision of a block, the boundaries of which are shown on recorded maps and plats

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Maker: One who creates or executes a promissory note and promises to pay the note when it becomes due

Market study: A forecast of future demand for a certain type of real estate project that includes an estimate of the square footage that can be absorbed and the rents that can be charged

Market value: The highest price a property would command in a competitive and open market under all conditions requisite to a fair sale

Marketable title: A title free from encumbrances that could be readily marketed to a willing purchaser

Maturity date: The date when the total principal balance comes due

Mechanic's lien: A claim created for the purpose of securing priority of payment of the price and value of work performed and materials furnished in constructing, repairing or improving a building or other structure

Metes and bounds: The boundary lines of land described by listing the compass directions and distances of the boundaries. Originally, metes referred to distance and bounds referred to direction.

Mortgage: A legal document by which real property is pledged as security for repayment of a loan until the debt is repaid in full

Mortgage constant: The ratio of an amortizing mortgage payment to the outstanding mortgage balance

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NAREIT (National Association of Real Estate Investment Trusts): The national, not-for-profit trade organization that represents the real estate investment trust industry

NCREIF (National Council of Real Estate Investment Fiduciaries): An association of real estate professionals who serve on working committees, sponsor research articles, seminars and symposiums, and produce the NCREIF Property Index

Negative amortization: The accrual feature found in numerous participating debt structures that allows an investor to pay, for an initial period of time, an interest rate below the contract rate stated in loan documents.

Net assets: Total assets less total liabilities on a market-value basis

Net investment in real estate: Gross investment in real estate less the outstanding debt balance

Net investment income: The income or loss of a portfolio or entity resulting after deducting all expenses, including portfolio and asset management fees, but before realized and unrealized gains and losses on investments

Net operating income (NOI): A before-tax computation of gross revenue less operating expenses and an allowance for anticipated vacancy. It is a key indicator of financial strength.

Net purchase price: Gross purchase price less associated debt financing

Net real estate investment value: The market value of all real estate less property-level debt

Net sales proceeds: Proceeds from the sale of an asset or part of an asset less brokerage commissions, closing costs and market expenses

Non-compete clause: A clause that can be inserted into a lease specifying that the business of the tenant is exclusive in the property and that no other tenant operating the same or similar type of business can occupy space in the building. This clause benefits service-oriented businesses desiring exclusive access to the building's population.

Non-recourse debt: A loan that, in the event of a default by the borrower, limits the lender's remedies to a foreclosure of the mortgage, realization on its assignment of leases and rents, and acquisition of the real estate

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Offer: Term used to describe a stated price or spread to buy or sell a piece of real estate.

Originator: A company that sources and underwrites commercial and/or multifamily mortgage loans

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Parking ratio: Dividing the total rentable square footage of a building by the building's total number of parking spaces provides the amount of rentable square feet per each individual parking space.

Partial sales: The sale of an interest in real estate that is less than the whole property. This may include a sale of easement rights, parcel of land or retail pad, or a single building of a multi-building investment.

Partial taking: The taking of part of an owner's property under the laws of eminent domain

Permanent loan: The long-term mortgage on a property

Plat: Map of a specific area, such as a subdivision, that shows the boundaries of individual lots together with streets and easements

Power of sale: Clause inserted in a mortgage or deed of trust giving the mortgagee (or trustee) the right and power, upon default in the payment of the debt secured, to advertise and sell the property at public auction

Prepayment rights: Rights given to the borrower to make partial or full payment of the total principal balance prior to the maturity date without penalty

Principal payments: The return of invested capital to the lender

Production acres: The area of land that can be used in agriculture or timber operations to produce income, not including areas used for crop or machinery storage, or other support areas

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Qualified plan: Any employee benefit plan that is qualified by the IRS as a tax-exempt plan. Among other requirements, the plan's assets must be placed in trust for the sole benefit of the employees covered by the plan.

Quitclaim deed: A deed operating as a release that is intended to pass any title, interest or claim that the grantor may have in the property, but not guaranteeing such title is valid

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Raw land: Unimproved land that remains in its natural state

Raw space: Unimproved shell space in a building

Real estate fundamentals: The factors driving the value of real property (i.e., the supply, demand and pricing for land and/or developed space in a given geographic or economic region or market)

Real property: Land, and generally whatever is erected or affixed to the land that would be personal property if not attached

Recourse: The right of a lender, in the event of default by the borrower, to recover against the personal assets of a party who is secondarily liable for the debt

Rehab: Extensive renovation intended to cure obsolescence of a building or project

Renewal option: A clause giving a tenant the right to extend the term of a lease

REO (Real estate owned): Real estate owned by a savings institution as a result of default by borrowers and subsequent foreclosure by the institution

Replacement cost: The estimated current cost to construct a building with utility equivalent to the building being appraised, using modern materials and current standards, design and layout

Reserve account: An account that a borrower has to fund to protect the lender. Examples include capital expenditure accounts and deferred maintenance accounts.

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Sale-leaseback: An arrangement by which the owner-occupant of a property agrees to sell all or part of the property to an investor, then lease it back and continue to occupy space as a tenant

Sales comparison value: A value indication derived by comparing the property being appraised to similar properties that have been sold recently

Second-generation or secondary space: Previously occupied space that becomes available for lease, either directly from the landlord or as sublease space

Secondary market: A market where existing mortgage loans are securitized and then bought and sold to other investors

Seisen (seizen): Possession of real property under claim of freehold estate

Setback: The distance from a curb, property line or other reference point, within which building is prohibited

Site analysis: Determines the suitability of a specific parcel of land for a specific use

Site development: The installation of all necessary improvements made to a site before a building or project can be constructed on the site

Site plan: A detailed plan that depicts the location of improvements on a parcel

Special assessment: Special charges levied against real property for public improvements that benefit the assessed property

Special servicer: A firm that is employed to work out mortgages that are either delinquent or in default

Stabilized net operating income: Projected income less expenses that are subject to change but have been adjusted to reflect equivalent, stable property operations

Subcontractor: A contractor working under and being paid by the general contractor, often a specialist in nature, such as an electrical contractor, cement contractor, etc.

Surface rights: A right or easement granted with mineral rights, enabling the possessor of the mineral rights to drill or mine through the surface

Survey: The process by which a parcel is measured and its boundaries and contents ascertained

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Taking: A common synonym for condemnation, or any interference with private property rights, but it is not essential that there be physical seizure or appropriation.

Tax base: The assessed valuation of all real property that lies within a taxing authority's jurisdiction. When multiplied by the tax rate, it determines the amount of tax due.

Tax lien: A statutory lien for nonpayment of property taxes that attaches only to the property upon which the taxes are unpaid

Tax roll: A list or record containing the descriptions of all land parcels located within the county, the names of the owners or those receiving the tax bill, assessed values and tax amounts

Tenant at will: One who holds possession of premises by permission of the owner or landlord. The characteristics of the lease are an uncertain duration and the right of either party to terminate on proper notice.

Tenant improvement (TI): Improvements made to the leased premises by or for a tenant

Tenant improvement (TI) allowance: Defines the fixed amount of money contributed by the landlord toward tenant improvements. The tenant pays any of the costs that exceed this amount.

Term: The lifetime of a loan

Title: The means whereby the owner has the just and full possession of real property

Title insurance: A policy issued by a title company that insures against loss resulting from defects of title to a specifically described parcel of real property, or from the enforcement of liens existing against it at the time the title policy is issued

Title search: A review of all recorded documents affecting a specific piece of property to determine the present condition of title

Total acres: All land area contained within a real estate investment

Total commitment: The full mortgage loan amount that is obligated to be funded if all stated conditions are met

Total principal balance: The total amount of debt, including the original mortgage amount adjusted for subsequent fundings, principal payments and other unpaid items (e.g., interest) that are allowed to be added to the principal balance by the mortgage note or by law

Trade fixtures: Personal property that is attached to a structure that is used in the business. Because this property is part of the business and not deemed to be part of the real estate, it is typically removable upon lease termination.

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Under contract: The period of time after a seller has accepted a buyer's offer to purchase a property and during which the buyer is able to perform its due diligence and finalize financing arrangements. During this time, the seller is precluded from entertaining offers from other buyers.

Unencumbered: Property that is free of liens and other encumbrances

Unimproved land: Most commonly refers to land without improvements or buildings but also can mean land in its natural state

Use: The specific purpose for which a parcel or a building is intended to be used or for which it has been designed or arranged

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Variable-rate: A loan interest rate that varies over the term of the loan, usually tied to a predetermined index. Also called adjustable-rate.

Variance: Permission that allows a property owner to depart from the literal requirements of a zoning ordinance that, because of special circumstances, cause a unique hardship

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Waiting period: The time between the initial filing of a registration statement and its effective date

Workout: The process by which a borrower attempts to negotiate with a lender to restructure the borrower's debt rather than go through foreclosure proceedings

Write-down: The accounting procedure used when the book value of an asset is adjusted downward to better reflect current market value

Write-off: The accounting procedure used when an asset has been determined to be uncollectible and is therefore charged as a loss

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Yield: The effective return on an investment, as paid in dividends or interest

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Zoning: The division of a city or town into zones and the application of regulations having to do with the architectural design and structural and intended uses of buildings within such zones

Zoning ordinance: The set of laws and regulations controlling the use of land and construction of improvements in a given area or zone

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