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COMMERCIAL RE GA
POST LICENSE HOURS
| Term | Definition |
|---|---|
| A & D Loan: | Acquisition and Development Loan created to fund both the acquisition of the land and the development of the project. |
| Absorption: | move-ins versus move-outs over a given period of time in a given market (absorption rate is absorption expressed as a percentage or ratio) |
| ADA | ADA is a federal law that requires certain types of developments and adjustments to residential and commercial buildings and businesses to provide services for the physically impaired and it prohibits discrimination on the basis of disabilities |
| ALTA | American Land Title Association |
| Anchor | the tenant who is the main draw or one of the main draws to the retail center, building or mixed-use development |
| Appurtenance | benefit to a property, special characteristic such as an easement that may add value or usefulness to the property itself |
| Assignee: | party who is receiving the transferred interest in the lease |
| Assignment | transfer of interest in a lease, the lease is assigned in whole to a new tenant; the landlord can also assign his/her interest in the lease |
| Assignor | party assigning or transferring his/her interest in the lease |
| Blanketing | negotiating tactic whereby one party puts all demands up front |
| Boundary Survey | Detailed drawing of a property depicting boundaries, dimensions, easements, rights of way, encroachments and structures on a property. |
| Bracketing: | negotiating tactic whereby the negotiator separates the issues to be negotiated in order of priority |
| BTS | build-to-suit (BTS) is basically a form of seller financing whereby the seller finances the land and/or the building and builds to suit the needs of the tenant. A BTS is considered a non-traditional source of financing |
| Build-to-Suit: | space or property built to suit the needs of a specific tenant, pre-leased or sold before construction |
| Bulk Warehouse Space | industrial type space with dock high and maybe drive-in doors, higher ceiling heights than 10 or 12 feet, under 10% typical office build out |
| BY | Base Year |
| CAD | Computer Aided Design development software. A CAD system is used to actually design and draw scale site plans and architectural plans for a project and automate the process. |
| CAM | (Common Area Maintenance): all those operating expenses incurred to maintain the common areas of the shopping center office building or group of buildings |
| Cash Flow: | Cash Flow is the remaining cash after all expenses and debt services are paid. |
| Gross Income (Gross Revenue) 200,000 (how to get to Effective Income?) | Less: Losses or bad debts 2,000 Plus: Miscellaneous Income 1,000 Equal: Effective Gross Income 199,000 |
| Gross Income (Gross Revenue) 200,000 (hot to get to Net Operating Income? already subtracted to Effective...) | Equal: Effective Gross Income 199,000 Less: Operating Expenses 70,000 Less: Replacement Reserve 10,000 Equal: Net Operating Income 119,000 Less: Interest 75,000 Less: Principal Payment 8,250 Equal: Cash Flow 35,750 |
| CBD | Central Business District |
| Class "A" Building: | Prime quality office space typically high quality build out and finish, higher relative maintenance, high level of amenities (covered parking, interior finish, retail services, etc., typically full service |
| Class "B" Building | good quality office space, lower level of amenities than Class "A", typically full service |
| CO: | Certificate of Occupancy |
| Commercial Broker Lien Laws: | can provide a means for a broker to collect a valid commission due on a commercial transaction by allowing the broker to file a lien on commercial real estate in order to get the commission. The broker is the only one who can file the lien, |
| Consideration: | something of value to induce another party to enter into an agreement; in order for an option to be valid, value must be exchanged |
| Contingency: | any condition or circumstance, including approvals or situations, that must be satisfied before the purchaser is obligated to purchase the contract property |
| Deed Restrictions: | Those encumbrances that limit the use of land in some way as stipulated in the deed or other recorded instrument, such as a restriction against the construction and operation of a gasoline station on the property for 20 years. |
| Developer: | A developer purchases land and improved it with infrastructure such as utilities and roads and then sells all or parts of it to users or builders. A developer also subdivides property. |
| Distribution Space: | industrial type space, with dock high and/or drive-in doors, typically between 10% -30% maximum office build out with medium high ceiling heights, above 12 feet up to 120 feet |
| Easement: | One party has rights to use the property of another in some way, thereby encumbering one property and benefiting another |
| EIS | Environmental Impact Study or Environmental Impact Statement |
| Encumbrance | An encumbrance is a burden on the real estate. Encumbrances usually benefit another party. Encumbrances include easements, mortgages and taxes due |
| Epicenter: | retail development that hosts a variety of online and catalog merchants under one roof; the customer is able to see and test the merchandise and is able to take advantage of instant, online purchasing technology on-site and the order is then shipped. |
| Exceptions to Title | Those conditions or encumbrances on property that will not be covered by a title insurance policy |
| Exclusive Agency Listing: | broker has the exclusive right to market the property with the exception of the owner, who may continue to market and sell the property |
| Exclusive Right to Sell Listing | most desirable type of listing is the exclusive right to sell listing because it offers the most protection for the listing broker |
| FAR: Floor Area Ratio | total square footage of building divided by total square footage of land area |
| FAR: Floor Area Ratio example | A building is 100 feet x 120 feet (total of 12,000 sf) The tract of land it occupies is 200 feet x 200 feet (40,000 sf) 12,000 sf/40,000 = .30 The building covers 30 % |
| Financial Analysis: | A study of the financial feasibility of a project to determine if the project will be profitable based on estimates of revenue and costs in a pro forma |
| FIRM: | Flood Insurance Rate Map |
| Flood Plain: | An area of land that is prone to flood conditions which has been designated on a Flood Insurance Rate Map (FIRM) |
| Forbearance: | negotiating tactic involving putting off the decision for no apparent reason |
| GIM: Gross Income Multiplier | Value (or Sales Price) divided by Gross Income GRM = Sales price / Annual Gross Income |
| GIS: Geographic Information System | integrated software package that relates real time demographic data to geographic data drawn from satellites |
| GRM: Gross Rent Multiplier | does not cover expenses GRM = Sales price / Annual Gross Rents |
| Hard costs: | those expenses that are direct costs that physically go into construction such as fill material, grading, and land costs |
| Impact fees | fees to be charged objectively based on the specific impact a development will have on specific public services. intended to give local governments the ability to provide and maintain certain public services |
| Infrastructure | infrastructure is what is needed to build a building on a tract of land. Infrastructure includes utilities, drainage systems, curb and gutter, and paving of roads |
| Ingress Egress Easement: | The easement benefits one party and burdens the property with the easement encumbering it |
| Lifestyle Center | upscale, open-air retail center with a "Main Street," layout so customers can park directly in front of the merchant |
| LOI | a letter expressing the purchasers desire to purchase the subject property on the stated basic terms. |
| Macro Economics | big picture and the influence factors have as a whole and their long-term impact. Examples of macro factors include Federal Reserve policies |
| Marketing: | an overall plan to make prospects aware of the product. |
| Micro Economics: | refers to issues on a smaller scale and more local level. Micro economic factors include local tax budgets |
| Neighborhood Center: | shopping center typically anchored by a grocery store or supermarket and other small shops, some drug stores, appeals to the local customer base |
| Office Retail: | office building with a retail shop or restaurant typically on street level; street-level retail |
| Open Listing: | loose type of listing that does not offer any exclusivity. The owner could have an infinite number of open listings on the property. |
| OPM | Other Peoples Money |
| Option: | An option gives one party the right to purchase the sellers property at a given price during a given period of time, provided consideration is exchanged for this right |
| Optionee | The Optionee is the buyer in an option. The Optionee has the right to purchase the optioned property at a given price during a given period of time |
| Optionor | The seller grants an option to a potential buyer in an option. The seller, or owner, is the Optionor |
| Outlet Mall: | Manufacturers outlet retail center |
| Percentage Lease: | also called a retail lease or shopping center lease; rental includes minimum base rent and a percentage of sales (gross sales, profit, etc.) is charged to the tenant along with CAM charges |
| Pre-leased Space: | space that is under construction that is leased, but not yet occupied |
| PUD: | Planned Unit Development |
| PV | Present Value |
| Recorded Plat: | Once a property is surveyed and a detailed site plan is submitted to the local authorities for approval, it is usually recorded to indicate approval for future reference |
| Regional Mall and Super-Regional Mall: | enclosed shopping center with a trade base drawn from several miles. Super-Regional denotes a larger size, mega-mall drawing from a larger distance |
| REIT: | Real Estate Investment Trusts; basically a collection of performing properties, such as apartments, shopping centers, hotels and office buildings, |
| Rentable Square Feet: | useable space plus all that space shared among tenant, useable plus common areas |
| Reversal: | negotiating tactic whereby one party recognizes the viewpoint of the other party and uses it to understand the situation and gain trust to negotiate a better deal |
| Rezoning: | To change the existing zoning designation from one designation allowing certain uses to another zoning designations allowing other types or variations of uses. |
| ROFR | : Right of First Refusal |
| ROW | Right of Way |
| RRM: | Renegotiated Rate Mortgage |
| Sale Leaseback | the owner of the property sells the property and in return leases it back on a long-term basis. The following describes a sales lease back situation: Owner A sells to Buyer B, who then leases the property back to Seller A. |
| SBS | Sick Building Syndrome |
| Service Space | industrial space, flex-space or business park space with drive-in and/or dock high doors, could be between 30% -100% maximum office build out |
| Set Aside: | negotiating tactic to set aside certain large issues and discussing other items of negotiations so the parties gain a sense of momentum |
| Soft costs: | costs that are indirectly incurred. Soft costs do not actually, physically go toward construction. Overhead such as the project engineers salary, the administrative costs, |
Created by:
stephrltr
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