A
AIF
Authorized investment funds. Tax-exempt unlisted UK funds
AIM
Alternative Investment Market of the London Stock Exchange
Absorption rate
The rate at which rentable space is filled. Absorption rate can be divided into gross …
Acceleration (relating to loan payments)
The process whereby a loan is declared due and payable prior to its scheduled repayment date, …
Amortization
Amortization refers to the spreading out of expenses over a specific period of time. In real …
Annual Percentage Rate (or APR)
The APR is the actual effective rate of interest charged on a loan expressed on a yearly basis …
Appraisal
An appraisal is the evaluation of a property to determine its price. Property is evaluated or …
Appreciation
Appreciation relates to the increase in the value of a property or an asset, such as stocks, …
Assignment
Assignment is the process by which a right or contract is transferred from one party to …
Authorized Investment Fund (AIF)
Tax-exempt unlisted UK funds
Averaging method
A technique used to forecast data by reducing or cancelling the effect of random variation in …
B
Base rate (in lease terminology)
An amount that is usually used as a minimum, or initial, rent. Depending on the lease …
Basis Point
A basis point, or bp, is a common unit of measure for interest rates and other percentages. One …
Basis
The total amount paid for a property, including equity capital and the amount of debt incurred.
Break-even point
The point at which the income from sale of a product or service equals expenditure. For real …
Bridge Loan
A bridge loan is a loan for a short duration of time. It can be used when one is purchasing one …
Buy-rent threshold
Buy/rent threshold refers to the point at which, as a result of market conditions there is a …
C
Capital Improvement
Capital improvements (or capital expenditures) are expenses which aim to add value to a …
Capital gain
An increase in the value of a capital asset. A capital loss is incurred when there is a …
Capitalization (Cap) Rate
A capitalization rate (or Cap rate) is an estimate of an investor's potential return on her …
Cash Flow
Cash flow is the income produced by an investment property after deducting operating expenses …
Cash-on-Cash Rate
It is a basic calculation to estimate the return from an asset that generates income. The …
Common Equity
Common equity refers to a measure of equity, which takes into account common stockholders and …
Comparables (Comps) or Comparative Market Analysis
Comps are used in assessing or establishing the fair market value of a property. Comps usually …
Consumer Price Index
CPI is an index indicating the change in prices of various commodities and services, providing …
Cost Approach
In real estate, it is an appraisal method for estimating the value of properties that have few, …
D
Debt
Debt refers to amount of money borrowed by one party from another, under the condition that it …
Debt-to-Equity Ratio
The debt-to-equity ratio is a measure of company's financial leverage and indicates the …
Debt-to-Income Ratio or Debt-Service Ratio
The debt-to-income ratio is the percentage of a borrower's monthly payment obligation on …
Development
In real estate, "development" refers to the building of a new structure, or improving existing …
Discount Rate
The Percentage rate at which money or cash flows are discounted. The discount rate reflects …
Distributions
Distributions of capital gains or income refer to payments made to investors periodically …
Due Diligence
Due Diligence refers to an investigation or audit of a potential investment. Due diligence …
E
EURIBOR
EURIBOR refers to the rates offered to banks on euro interbank term deposits and are considered …
Efficiency ratio
Efficiency ratios are typically used to analyze how well a company uses its resources. For real …
Electronic Signature
An Electronic Signature or e-Signature is an electronic sound, symbol, or process, attached to …
Equity
Equity represents an ownership interest in an asset. Equity investments in real estate carry …
Escrow
A state where consideration, benefits, legal rights, document, or a sum of money is held by one …
F
Fair Market Value
The fair market value is the price for property agreed upon between a buyer and seller in a …
Feasibility analysis
An analysis and evaluation of a proposed project to determine if it is technically feasible, …
Financial Conduct Authority
The FCA (Financial Conduct Authority) is the financial regulatory body in the UK. It operates …
Financial leverage
Financial leverage refers to the degree to which a company uses debt and preferred equity in …
Financial risk
Financial risk usually refers to an uncertainty in an investment's ability to return funds …
Free Cash Flow (FCF)
Free cash flow (FCF) is a measure of how much cash a business generates after accounting for …
G
Gross Lease
A gross lease is a lease in which the lessor pays all costs of operating and maintaining the …
H
Hard Asset
A tangible and physical item or object of worth that is owned by an individual or a …
I
Income capitalization approach
A method to estimate the value of an income-producing property by converting net operating …
Instalment Sale
An instalment sale is a property sale in which the purchaser pays the purchase price over a …
Internal Rate of Return (IRR)
Internal Rate of Return (IRR) measures the profitability of an investment the higher a …
L
LIBOR Index
Stands for -London Interbank Offered Rate-, and is the average yield of interbank offered rates …
Liquidation value
The likely price that a property would bring in a forced sale. Used when a sale must occur with …
Loan-to-Cost Ratio (LTC)
A ratio used in commercial real estate construction to compare the amount of the loan used to …
Loan-to-Value Ratio (LTV)
mortgage. Typically, assessments with high LTV ratios are generally seen as higher risk and, …
M
Maintenance
The monthly charged levied on owners by a cooperative corporation to cover the building's …
Market analysis
The process of examining market supply and demand conditions, demographic characteristics, and …
Market value
The most probable price that a property would bring in a competitive and open market under fair …
O
Occupancy Cost
The actual dollars paid out by the tenant to occupy the space (including rent, property taxes, …
Occupancy
In real estate, the number of units in a building that have been rented out as compared to the …
P
Passive Loss
A passive loss is a loss generated by investment real estate when real estate is not the …
Phantom Gain
A sale of real estate in which income is recognized for tax purposes but no money has been …
Potential Rental Income
The total amount of rental income for a property if it were 100% occupied and rented at …
Preferred Equity
Preferred equity is usually considered a hybrid instrument, and is a type of stock which may …
Preferred Return
Preferred return refers to a fixed payment received by holders of company's preferred stock. …
Pro-Forma
Pro-forma usually refers to projected financial statements or a financial model often based on …
Probabilities and Expected Value
A quantifiable method of risk analysis. This method assigns probabilities to specific, possible …
R
Real Estate Broker
A real estate broker is an individual employed on a fee or commission basis as an agent to …
Real Estate Investment Trust (REIT)
An investment vehicle in which investors purchase certificates of ownership in the trust, which …
Recapture
When investment real estate has been depreciated for tax purposes, the gain on the sale …
Redemption
The return of an investor's principal in a fixed income security, such as a preferred stock or …
S
Secured Position
A secured position retains the right to foreclose on a property in the event of a default, or …
Senior Debt
Loan that a company must repay first if it goes out of business. Senior debt holders are most …
Sponsor
An individual or firm in charge of finding, acquiring, and managing a piece of real estate, …
U
Underwriter
Usually refers to a party that takes on risk. For instance, a securities dealer will act as an …
Underwriting
Underwriting process involves the satisfactory review of the issuers property appraisal and …
Y
Yield
Yield refers to return on investment. The return could be in interest or dividends received …