Glossary

  1. Abatement:
    Abatement is a reduction in the level of taxation faced by an individual or company. Examples of an abatement include a tax decrease, a reduction in penalties or a rebate. If an individual or business overpays its taxes or receives a tax bill that is too high, it can request an abatement from the tax authorities. Sometimes city governments will offer tax abatements to attract businesses to build in their city.
  2. Absolute NNN/Bonded Lease:
    This type of commercial lease is usually a long-term lease to a credit tenant. The tenant pays all expenses including taxes, insurance, maintenance and repairs which may include the roof and other structural issues.
  3. Accredited Investor:
    An accredited investor is a term that the U.S. Securities and Exchange Commission (SEC) uses in relation to Rule 501 of Regulation D.  1. An accredited investor can be described as an individual who earns an individual income over $200,000 per annual or a married couple earning an income of $300,000, in each of the last two years and expects to reasonably maintain the same level of income. 2. An accredited investor can be a high net worth person who is worth over 1 million dollars, either an individual or married, which excludes their primary residence.
  4. Accrual Rate:
    The periodic rate at which interest is due on a loan, and may differ from the current pay rate.
  5. Accrued Interest:
    Interest due on a loan that has not yet been paid. Accrued interest usually must be paid before any principal reductions are allowed on the loan.
  6. Adaptive Reuse:
    The process of reusing an existing building for a different purpose than what it was originally built for. For example, a mill building that has been converted into loft apartments.
  7. Add-on Factor:
    The number of usable square footage divided by the number of rentable square footage in the lease. Lease costs are calculated based upon the rentable area, which includes some square footage that will not be usable. Non-usable space includes common areas maintained (CAM) and space for elevator shafts, and the like. This means that for the same amount of usable space, a building with a lower add-on factor will cost the tenant less than a building with a higher add-on factor. Potential tenants can calculate a value based on the add-on factor.
  8. Adjustable Rate Mortgage (ARM):
    A loan on which the interest rate adjusts periodically (e.g. monthly, every six months, annually). The rate is stated as a spread over a published index rate (e.g. 250 basis points over the 10-Year Treasury).
  9. Alternative Investment:
    An investment that is not one of the three traditional asset types (stocks, bonds, and cash). Most alternative investments are held by institutional investors or accredited, high-net-worth individuals due to their complex nature, limited regulations, and relative lack of liquidity. Alternative investments include hedge funds, managed futures, real estate, commodities and derivatives contracts.
  10. Amortization:
    Loan repayment schedule to pay off debt. The principal portion of the periodic payments increase but the interest portion of the payments decrease over time.
  11. Anchor Tenant:
    Usually the largest, leading tenant in a commercial property, i.e., national retail store. The anchor tenant's brand equity and ability to attract traffic to the site also attracts smaller tenants.
  12. Annual Debt Service:
    The total amount of principal and interest required each year for payment on debt obligations.
  13. Appraisal:
    Property valuation by an appraiser who determines current market value.
  14. Appreciation:
    An increase in the monetary value of a property.
  15. Assessed Value:
    The monetary value assigned to a property by a tax assessor on land and/or structures for purposes of levying real estate taxes.
  16. Availability Rate:
    The ratio of available space to total rentable space, calculated by dividing total available square feet by total rentable square feet.
  17. Available Space:
    The total amount of space that is marketed as available for lease in a given time period. This includes any space that is available, regardless of whether that space is vacant, occupied, available for sublease, or available at a future date.
  18. Average Daily Rate (ADR):
    A hospitality metric measuring the average rate paid for rooms sold, calculated by dividing total daily room revenue by rooms sold on a given day. This is one of the core indicators used to measure the operating performance of a hotel.
  19. Balloon Payment:
    An oversized payment due with the final payment of a loan. This payment encompasses the remaining loan balance because the life of the loan was shorter than the amortization period.
  20. Base Rent:
    A set amount used as a minimum rent with provisions to increase the rent during the lease term.
  21. Base Year Stop:
    The annualized amount per rentable square foot that a landlord pays toward the operating expenses of a building. Amounts exceeding the expense stop in subsequent years are billed back to the tenant. Expense stops are often set following the first year ("Base Year") of the lease.
  22. Basis:
    The total amount paid for a property, including equity capital and the amount of debt incurred.
  23. Basis Points (BPS):
    Tool for interest rates comparison, One hundredth of one percentage point, or 1/100 of 1 percent.
  24. Breakpoint:
    A term seen in retail leases, this is the sales threshold over which percentage rent is due. Breakpoint is calculated by dividing the annual base rent by the negotiated percentage applied to the tenant's gross sales.
  25. Bridge Loan:
    Short duration loan used to "bridge the gap" until permanent financing can be secured.
  26. Buildout:
    The space improvements put in place as requested by the Tenant (this considers the amount of Tenant Improvement Allowance provided for in the lease agreement).
  27. Build-to-suit:
    A contract in which the owner agrees to develop a property specifically for a certain tenant to occupy, with structural features designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long-term lease on the space.
  28. Capital:
    Capital is a financial asset (or its value).
  29. Capital Gain:
    An increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.
  30. Capital Stack:
    A description of the totality of capital invested in a project, including pure debt, hybrid debt, and equity. The stack is described as containing the most risk at the top, traveling down the stack to the position with the least risk at the bottom. The higher the position in the stack, the higher the expected returns.
  31. Capitalization Rate (Cap Rate):
    The ratio between the yearly income that a property produces before reserves, capital costs and debt service-also known as Net Operating Income (NOI)-and the value of the property. The Cap Rate is determined by dividing the NOI by the Property Value. This metric estimates the investor's annual potential return on their investment.
  32.  Cash-on-Cash Return:
    The annual return on an investment calculated by dividing the levered cash flow (NOI - reserves, capital costs and debt service) by total equity investment. Also referred to as Equity Yield Rate.
  33. Commercial Mortgage Backed Security (CMBS):
    Securities collateralized by a pool of mortgages on commercial real estate in which all principal and interest from the mortgages flow to certificate holders in a defined sequence or manner.
  34.  Common Area Maintenance (CAM):
    CAM refers to the payments by the tenant for the conservation of any shared areas within a property. Common areas include spaces such as parking areas, restrooms, and lobbies.
  35. Concessions:A relief or reduction in total payments for a period of time used as an incentive to attract or retain tenants in lease agreements. Concessions can include reduced or free rent (abatements) for a portion of the lease period, above-market tenant improvement, and work letters. Concessions are generally a response to current market conditions.
  36. Contiguous Blocks of Space:Property space that is currently, or can be, joined together to create a single contiguous space.
  37. Contract Rent:The current value being paid by a tenant according to the specifications of the lease
  38.  Corporate Guarantee:A guaranty made by the issuer (issuer guaranty) or a third-party to cover losses due to delinquencies up to the guaranteed amount; found in leases and mortgages.
  39. Cost Approach:A valuation approach used to determine a property's value.
  40. Co-Tenancy Provisions:A clause in retail leases that permits a tenant to reduce its rent or cancel its lease if another major tenant vacates the property and another equal tenant does not take occupancy.
  41. Crowdfunding:
    Crowdfunding is just what it sounds like, raising money, or funds, from a crowd of people, as opposed to just a few investors.
  42. Custodian:
    Provides custody of the assets, processes all transactions, and maintains pertinent records, issues client statements, helps clients understand the rules and regulations pertaining to certain prohibited transactions, and performs other administrative duties on behalf of the self-directed IRA owner. Self-directed IRA custodians are equipped to handle the increased complexity of documentation required for transactions involving alternative investments.
  43. Debt:
    An amount of money (obligation) owed by one party (the debtor) to another party (the creditor).
  44. Debt Service:
    The scheduled payments due on a loan, including principal, interest and any other fees required by the loan agreement.
  45. Debt Service Coverage Ratio (DSCR):
    Calculated by dividing the property's Net Operating Income (NOI) by the debt service. DSCR is a measure of a mortgaged property's ability to meet monthly debt service payments. The higher the ratio, the more likely a property is to continually cover its debt service. A DSCR less than 1.0 means that there is insufficient cash flow to cover debt payments.
  46. Debt Yield:
    Calculated by dividing the Net Operating Income (NOI) by the total outstanding loan amount. In its simplest form, the Debt Yield is the expected return on investment for a lender were it to take back the property through foreclosure.
  47. Defeasance:
    A prepayment method whereby the collateral on a mortgage is replaced with government bonds which replicate the scheduled cash flows for the remainder of the loan term. Defeasance guarantees that future cash flows will be undisturbed by the prepayment, and effectively raises the credit rating on the collateral to the U.S. Government's credit rating. The cost of the defeasance to the borrower is the difference between the remaining loan balance and the cost of the government securities replacing the loan.
  48. Deferred Maintenance Account (Replacement Reserve Account):
    A reserve account established by the borrower to cover future property maintenance costs.
  49. Demographics:
    The characteristics of a population in a given area, more specifically population size, income levels, age, race, and gender.
  50. Depreciation:
    The reduction in the value of an asset due to time and aging. In real estate, buildings and improvements can take a depreciation deduction for tax purposes, while land is excluded.
  51. Development:
    Development refers to the building of a new structure or adding to an existing structure to increase its property value.
  52. Discount Rate:
    The rate used in Discounted Cash Flow (DCF) analysis to determine the present value of future cash flows. The discount rate not only takes into account the time value of money, but also the risk or uncertainty of future cash flows. The greater the uncertainty of future cash flows, the higher the discount rate.
  53. Discounted Cash Flow Analysis:
    Discounted Cash Flow (DCF) Analysis is a valuation method used to estimate the attractiveness of an investment opportunity. Discounted cash flow analysis discounts future cash flow projections at a specified discount rate to arrive at a present value.
  54. Distributions:
    Periodic payments made to investors either from profits or interest payments.
  55. Due Diligence:
    Part of the underwriting process that involves the inspection of a property, analysis of the market, assessment of the tenancy and the evaluation of financial records. Proper due diligence protects investors from unethical and unprofessional practices and is said to be the cornerstone of securities law.
  56. Earn-Out:
    A loan agreement that provides additional funds to a borrower once certain operating performance hurdles are hit such as debt yields, debt service coverage ratios or loan to values. Earn-out loans are made on properties of which performance is expected to improve in the near-term due to factors such as renovations, re-tenanting or repositioning.
  57. Effective Rent:
    Effective rent is the contract rent less free rent and any cash allowances such as a lease buyout or moving allowance. Escalations in the lease are included in the effective rent, however, tenant improvements and brokerage commissions are not subtracted from the contract rate.
  58. Equity Multiple:
    A ratio dividing the total net profit plus the maximum amount of equity invested by the maximum amount of equity invested. The Equity Multiple of an investment does not take into account when the return is made and does not reflect the risk profile of the offering or any other variables potentially affecting the project's return.
  59. Escrow:
    A deposit held by a third party on behalf of a borrower and a lender in a transaction. The funds are held by the escrow service until it receives the appropriate written or oral instructions or until obligations have been fulfilled.
  60. Fair Market Value:
    The fair market value of a property is the price it would receive in an open marketplace given all prospective buyers have the same level of knowledge of the asset, there is no undo pressure for the sale to be completed, and a reasonable time period was provided for the transaction to be completed.
  61. Feasibility Analysis:
    An analysis that determines the likelihood of success for a given project. The analysis takes into account many factors including legal, economic, technological and capital markets. An effective feasibility analysis takes into account both negative and positive outcomes and allows decision makers to compare multiple projects.
  62.  Fixed Lease:
    A lease in which the tenant pays a fixed payment for the entirety of the contract.
  63. Equity:
    As it relates to real estate, equity can be measured as the amount of capital a sponsor (property owner/developer) puts into a property.
  64. Free Cash Flow (FCF):
    Free cash flow is a measure of a property's ability to generate cash after setting aside reserves for capital expenditures which may include future development, leasing commissions, and tenant improvements.
  65. Gross Leasable Area (GLA)  and Gross Lease:
    The total square footage of a building generally measured from the external walls.A gross lease is a type of commercial lease where the landlord pays for all taxes, insurance, and maintenance. These charges are included in the base rent and a tenant will generally pay the increases over a base year stop.
  66.  Gross Rent Multiplier:
    The gross rent multiplier is often used in smaller apartment buildings to determine the property's value. This method uses the annualized income from the property's rents and applies a multiplier to determine the value.
  67. Ground Lease:
    A ground lease is generally a long-term (often 99 years) lease to a developer or tenant to develop building improvements. The developer or tenant will own the structures and pay rent to the landlord for use of the land during the term of the lease. At the end of the lease, the land and all structures and enhancements revert to the land owner. Therefore, the tenant pays a set sum or "gross" amount of rent and the landlord pays all real estate expenses.
  68. Hard Asset:
    A tangible object of worth that is owned by a business or individual.
  69.  Highest and Best Use:
    The rationally credible and permissible use of land or a vacant property that produces the best financial outcome and overall return.
  70. Hold Period:
    The holding period is the lifespan of a given investment
  71. Intrastate Crowdfunding:
    Public securities are regulated nationally by the Securities and Exchange Commission (SEC). Each state also regulates via its own regulatory system. Since the passage of the JOBS Act, advocates of equity crowdfunding have moved to legalize intrastate - or in state - crowd funding.
  72. Internal Rate of Return (IRR):
    The rate of return on invested capital that is generated, or capable of being generated, from the investment within the ownership period. IRR in its simplest terms is the estimated total interest rate paid to an investor for their initial contribution.
  73.  Jumpstart Our Business Startups:
    The Jumpstart Our Business Startups (JOBS) Act is a law intended to facilitate funding of small businesses by easing regulations, making it easier to access public capital markets.
  74. Landlord:
    The owner of a property, otherwise known as the lessor.
  75.  Lease:
    A contract between the lessor and the lessee, the tenant. A binding agreement that gives the tenant exclusive use of the property for a payment of rent.
  76. Lessee:
    The tenant leasing or renting the property.
  77.  Lessor:
    The landlord that is renting out the property to another person or business.
  78. Lease Buyout:
    The process in which a tenant, landlord or third party pays to terminate the tenant's existing lease agreement.
  79.  Letter of Intent (LOI):
    A letter of intent is a non-binding agreement between the landlord and tenant that states the two parties' will to enter into a transaction. The document outlines the proposed transactions to which either party can review and counter.
  80. Leverage:
    The usage of borrowed funds to help fund an investment. The use of leverage allows a borrower to maximize their purchasing power and afford larger properties. Leverage can also produce increased returns on equity, but can also add risk.If the cap rate (NOI/Purchase Price) is greater than the loan constant (Debt Service/Loan Amount) then using leverage will magnify returns (Positive Leverage). If the cap rate is less than the loan constant, additional leverage will hurt overall returns.
  81. Limited Liability Company (LLC):
    A corporate structure whereby the members of the company cannot be held personally liable for the company's debts or liabilities. An LLC combines the characteristics of a corporation and a partnership or sole proprietorship. The limited liability feature is similar to that of a corporation, but the availability of flow-through taxation to LLC members is a feature of partnerships.
  82. Liquidity:
    The ease and frequency which an asset or security can be bought or sold in the secondary market.
  83. Loan Constant:
    An interest rate percentage that is used to calculate the debt service of a loan. When the loan constant is multiplied by the loan principal, it will give you the dollar amount of the payment.Example: a $1,000,000 loan with a 10% constant will yield a $100,000 annual payment. The formula for the loan constant is the annual loan payment/loan amount = loan constant.
  84.  Loan-to-Cost Ratio (LTC):
    The Loan-to-Cost Ratio is the ratio of a loan used to finance a project compared to the total cost.
  85. Loan to Value Ratio (LTV):
    This ratio compares the amount of money borrowed to the market value of a property.
  86.  Make Whole Call (Provision):
    A type of call provision on a bond allowing the borrower to pay off remaining debt early. The borrower has to make a lump sum payment derived from a formula based on the net present value (NPV) of future coupon payments that will not be paid because of the call.
  87. Market Data Approach:
    A valuation approach that analyzes recent sales or rental prices of comparable properties in a specified area.
  88. Market Rent:
    Rent value of the property if leased today based on locale, building specifications and comparables.
  89.  Mezzanine Debt vs. Preferred Equity:
    Mezzanine is subordinate debt that gives the lender the right to convert to an ownership or equity interest in the company if the loan is not paid back on time and in full. Mezzanine debt is the level of debt between senior or asset-backed debt and corporate equity. Mezzanine Debt is generally a loan that is secured by a property and senior to any equity, but junior to the senior loan on the property. Preferred Equity, on the other hand, is an equity investment in the property-owning entity. It is not secured by the property but rather by an interest in the entity investing in (or owning) the property.
  90. Net Lease:
    A net lease differs from the gross lease. In a net lease, the tenant pays their utilities and property taxes in addition to rent (and possibly insurance). The landlord may pay maintenance and repairs costs, and any property taxes or insurances which the tenant does not pay.  Other terms include single net lease or modified gross lease.    Three types of net leases include 1. Single net (N) A single net lease requires the tenant to pay for property taxes. 2. Double net (NN) A double net lease requires the tenant to pay for property taxes and insurance. 3. Triple net (NNN) Triple net lease requires the tenant to pay for all three taxes, insurance and maintenance expenses.
  91.  Net Operating Income:
    (NOI) as it is referred to is the gross revenue minus any operating expenses and allowances for the anticipated vacancy. This income is the complete rental income from all tenants and any other sources of revenue, such as signage minus all operating expenses, such as taxes, maintenance and repair costs, and insurances. NOI is often considered a key indicator of financial success and is, therefore, is one of the most important values for an investor to analyze because this quantitative amount includes the return. Remember that this number does not consider financing or capital improvement costs.
  92. Net Purchase Price:
    Gross purchase price minus any associated debt financing.
  93.  Net Present Value (NPV):
    Sum of the total present value of incremental future cash flows plus the present value of estimated sales proceeds.
  94. Non-performing loan:
    A real estate loan that cannot meet its contractual principal and interest payments.
  95.  Non-recourse debt:
    A real estate loan that limits the lender's remedies to foreclosure of the mortgage, realization on its assignment of leases and rents, and acquisition of the real estate including any recourse against the borrower, should the borrower default of the loan.
  96. Occupancy Cost:
    The expense paid out by a tenant to occupy a unit. This can either be expressed in after-tax or pre-tax dollars.
  97.  Occupancy Rate:
    The comparison between the total number of rooms or units to the total amount of space available. Example: A strip mall has 20 available units for different tenants. Currently, there are 15 spaces occupied. The occupancy rate would be 75%. This rate is important to investors because it is a quick indication of anticipated cash flows.
  98. Operating Expenses:
    Payments necessary to operate and maintain a property. Some typical operating expenses are property management, real estate taxes and maintenance expenses.
  99. Out Parcel:
    Individual retail sites in a shopping center also referred to as Pad sites.
  100.  Participation Mortgage:
    This is a loan that is secured by real property. This allows the lender to receive part of the earnings from production or resale.
  101.  Perfect Market:
    In contrast to an imperfect market, a perfect market is homogeneous in its offerings and no one buyer or seller may directly impact it.
  102. Performance Based Fees:
    Fees paid to advisors or real estate managers based on returns to investors, often packaged with a modest acquisition and asset-management fee structure.
  103.  Physical Depreciation:
    The physical decay or deterioration that a property may receive from aging, weather or breakage.
  104. Population Migration:
    This refers to the migration or movement of people from one place to another due to economic and social factors. This can have a major effect on real estate values.
  105.  Potential Gross Income:
    The total income generated by the operations of the property before any expense payments.
  106. Property Type:
    The organization of commercial real estate based on its use. Classifications include industrial, office, retail and multi-family residential.
  107.  Preferred Equity:
    Typically, in a Preferred Equity investment, all cash flow or profits are paid back to the preferred investors (after all debt has been repaid) until they receive the agreed upon "preferred return."
  108. Preferred Return:
    A Preferred Return is paid to investors before a sponsor receives any share of the cash flow.
  109.  Pro-Forma:
    The financial model often used in real estate to predict future cash flows and total investment returns.
  110. Project Payment Dependent Notes:
    A Project Payment Dependent Note is a special, limited obligation of Capital Investments, LLC sold to investors, the proceeds of which are used to fund corresponding project investments.
  111.  Preferred Shares or Units:
    Shares that have a prior claim on distributions (and/or assets in the event of dissolution) up to a definite amount before the common shareholders are entitled to anything. Preferred shareholders rank behind all creditors in dissolutions.
  112. Private Equity Fund:
    A pooled investment fund vehicle targeting investors, typically structured as a private real estate investment trust (REIT), or another form of real estate operating company, that invests in direct equity real estate holdings on behalf of its shareholders or Unitholders.
  113.  Private Placement:
    A sale of a security in a manner that is exempt from the registration rules and requirements of the Securities and Exchange Commission (SEC).
  114. Raw Land:
    Unimproved land that remains in its original or raw state.
  115. Real Estate:
    Includes a parcel of land and any of its permanent structures such as buildings and parking lots.
  116. Real Estate Fundamentals:
    Factors that drive the value of real estate (i.e., the supply, demand and pricing for land and/or developed space in a given geographic or economic region or market).
  117. Real Estate Investment Trust (REIT):
    A real estate trust or corporation that pools the capital of investors to acquire or provide financing for real estate. A real estate trust or corporation qualifies for REIT status i.e. does not pay corporate income tax to the IRS, by paying out at least 90 percent of its taxable income in the form of dividends to investors.
  118. Real Estate Owned (REO):
    Real estate owned by a bank or financial institution as a result of default by borrowers and subsequent foreclosure by the institution.
  119. Regulation A:
    Regulation A allows unaccredited investors to purchase small offerings of securities that do not exceed $5 million in a 12-month period.
  120. Regulation D:
    Regulation D permits a sponsor to raise unlimited amounts of capital from accredited investors without registering a public sale through the SEC, as it's assumed that accredited investors are financially able to bear the burden of investment decisions without a review by the SEC.
  121. Redemption:
    In the event of back taxes or unpaid liens, a borrower who pays off those debts may reclaim their property, preventing foreclosure or the auctioning of their property.
  122. Rentable Square Footage:
    Rentable sq. footage differs from usable sq. footage. Rentable sq. footage is the entire area for which tenant is charged rental fees, including common areas, waiting rooms and restrooms.
  123. Residual Value:
    The amount a fixed asset is worth at the end of its lease, or at the end of its useful life.
  124. Return on Equity (ROE):
    Income available to stockholders for the trailing 12 months divided by the average common equity, expressed as a percentage.
  125. Return on Investment (ROI):
    Historical income after taxes divided by the average total long-term debt, other long-term liabilities and shareholders' equity, expressed as a percentage.
  126. Revenue Per Available Room (RevPAR):
    Hotel industry performance measurement. The total hotel guest room revenue over a specified time period divided by the number of available rooms in the hotel in the same time period. This is calculated by multiplying a hotel's average daily room rate (ADR) by occupancy rate.
  127. Secured vs Unsecured Position:
    A secured position in the Capital Stack retains the right to foreclose on a property in the event of a default, or non-performance. Unsecured creditors do not have the right to foreclose on the property, and therefore have less collateral backing their investment claim.
  128. Sponsor:
    An individual or firm in charge of finding, acquiring, and managing a piece of real estate.
  129. Sale Leaseback:
    A financing and leasing strategy in which a landlord sells its property to an investor. In turn, the investor then leases it back which frees up capital.
  130. Scale Economies:
    The idea of reducing costs by producing more.
  131. Self-Directed IRA (SDIRA):
    A retirement account in which the individual investor is in charge of making the investment decisions and provides the investor with an opportunity to diversify their investments. All securities and investments are held in an account administered by a custodian.
  132. Senior Debt:
    Borrowed money that a company must repay first if it goes out of business. Companies have a number of options for obtaining financing, including bank loans and the issuance of bonds and stocks. Each type of financing has a different priority level in being repaid if the company decides to liquidate.Senior debt is secured by collateral, and that collateral can be sold to repay the senior debt holders. As such, senior debt is considered lower risk and carries a relatively low-interest rate.
  133. Site Selection:
    Evaluation of qualities, conditions and/or elements which make a property a "good property" and are important in the overall evaluation of a site(s) or property.
  134. Special Purpose Entity (SPE):
    Operations are limited to the acquisition and financing of specific assets, a.k.a., "bankruptcy-remote entity". SPE's are typically a subsidiary, with an asset/liability structure and legal status that makes its obligations secure.
  135. Technical Feasibility:
    The evaluation of multiple sites to determine which should be considered further based on environmental concerns, physical restrictions, regulatory requirements and legal considerations.
  136. Tenant:A business or person that has control of a property through a contractual lease.
  137. Tenant Improvements:Improvements made by the owner to meet the needs of the tenant.
  138. Tenancy / Occupancy:Occupancy is generally referred to as a percentage of the total square feet or units leased - it is a building's revenue source.
  139. Term:The lifespan of a given asset or liability.
  140. Time Value of Money:A dollar today has a greater value than a dollar in the future due to earning power.
  141. Title III Regulation Crowdfunding:Outlined in the 2012 JOBS Act, Title III instructed the SEC to create an exemption from registration that, when implemented, will enable issuers to engage in crowdfunding equity offerings to the general investing public.
  142. Unaccredited Investor:Investors who do not meet the financial requirements as defined by the SEC.
  143. Usable Square Footage:The square footage which is usable by the tenant. Usable sq. ft. may include room for storage, an area only usable by one or two tenants, rest rooms. This square footage does not include common areas such as lobbies, shared hallways, and shared rest rooms. Useable square footage is usually presented vs. rentable square footage.
  144. Vacancy Rate:The percentage of the total amount of vacant space divided by the total amount of existing inventory. Formula: a strip mall has 40 available units for different tenants. Currently, there are 30 spaces occupied and 10 units vacant. This means there is a 25% vacancy rate.
  145. Zoning:Planning authorities legally outline what specific land must be used for. An example of a classification of land use is retail or industrial.

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