GLA (Gross living area)
above ground furnished space
WALT
weighted average lease term
LXD
lease expiration date
LC (leasing commissions)
What a leasing agent receives
LCD
lease commencement date
Equity Multiple
amount of cash an investor will receive over the lifetime of their investment
IRR (internal rate of return)
percentage rate of each dollar invested for that investment period; represents the profitability of your investment; institutional investors prefer this metric
FAR (floor area ratio)
height of a building
CPI (consumer price index)
monthly measure of average change over time of prices paid by consumer for a basket of market goods
ETO
early term option
CAM (common area maintenance)
usually property manager is responsible for this; used for upkeep of maintenance
FFO
funds from operations
SOFR (Secured Overnight Financing Rate)
an overnight, unsecured, risk fee rate; more representative of the financial tone of the market compared to LIBOR; helps determine the appropriate rate for financing arrangements
leveraged debt
refers to the use of borrowing to meet the required payment; you want to leverage more value than you would have otherwise
Unlevered Debt
refers to having the cash flow before paying debt, interest, taxes, and expenses
RTU
roof-top unit
on-grade
a drive in door
above grade
loading dock doors for trucks; usually 4' above ground
wet system
water running through the building at all time
dry system
water comes from somewhere else
100% fee interest
owning all the rights to the property and land
leased fee
owning rights to the building, not the land
fee simple
all rights are assigned to the land and the building
limited capital outlay
does not need structure improvements
dock sealers
a protective that goes around the truck to blow the elements when moving in and out
dock level
a ramp to make the truck the same level as the ground
frontage
first building off of the highway
visibility
you can see the building from the highway or the highway from the building
turnkey
a move in ready building or home that does not need any additional repairs or very limited if at all
loss to lease
the difference between the market rental rate and the actual rental rate of the lease
bad debt
loans or outstanding balances that are no longer recoverable and must be written off; a risk you take when doing business with a client on credit
revPAR (revenue per average room)
assesses a hotel's ability to fill its available rooms at an average rate
NCF (Net Cash Flow)
includes TI's, LC's and Capex
LOI (letter of intent)
a document outlining the general plans of an agreement between two or more parties before said agreement is finalized
PPI (Producer Price Index)
what suppliers are charging business and other customers
DCF (discounted cash flow)
is a measure that represents the required total return of future cash flows at a discounted rate; the higher the perceived risk, the higher discount rate investors want to see on their future cash flows; a different perspective of IRR
Cap Rate
a measure of a property's yield after one year; has an inverse relationship with property values; net income (gross income - expenses) / purchase price
Cash Flow statement
Backbone of RE financial modeling, provides the basic framework to model cash inflows and outflows (EOLCCDC)
Effective Gross Revenue
revenue generated at/from the property
Operating Income
anything that is necessary or ordinary to operate the property
NOI
ordinary operating income from operations; investors use this evaluate cap rates and lenders use this determine the total amount for a loan
Capital Expenses
Usually a 1-time, non-recurring expense
Cash Flow Before Debt Service
actual income taking into account total capital expenses before any debt
Debt Service
loan payments, principal payments, interest payments
Cash flow After Debt Service
operating cash flow; the bottom line cash flow in or out of investor service; what the cash flow looks like on an annual basis when the property is being operated