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50 Cards in this Set
- Front
- Back
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Recovery |
A period of increasing economic activity or a general economic upturn, typically following a stabilization of key sectors and industries, marked by increasing sales and recovering prices in real estate markets as a direct result of an external shock (for example, a favorable tax code revision) or an increase in demand for commercial real estate which, in turn, leads to the absorption of excess space. Little or no construction occurs during the initial stages of this phase until most of the excess space is absorbed or until reasonable financing opportunities become available. |
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Regional center |
This center type provides general merchandise (a large percentage of which is apparel) and services in full depth and variety. Its main attractions are its anchors: traditional, mass merchant, discount department stores, or fashion specialty stores. A typical regional center is usually enclosed with an inward orientation of the stores connected by a common walkway and parking surrounds the outside perimeter. |
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Regulatory requirements |
In reference to land use, they are restrictions or guidelines on development or use of land, properties, or facilities as defined in accordance with design standards, building construction requirements, land use plans, occupancy codes, and zoning classifications as determined by the controlling or governing parties at the municipal or county levels. |
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Rent concession |
A period of free rent given to the tenant by the lessor. |
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Rentable area |
The computed area of a building as defined by the guidelines of Building Owners and Managers Association (BOMA) and typically measured in square feet, including both core/structure and useable area. The actual square foot area for which the tenant will pay rent. It is the gross area of an office building, less uninterrupted vertical space (such as stairways and elevators). Unlike useable area, rentable area includes common areas such as lobbies, restrooms, and hallways as well as the measurement of structural columns and architectural projections. |
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Rentable-to-useable ratio |
Defined as rentable area divided by useable area. Also known as the add-on factor or load factor. Also see efficiency percentage. |
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Rent escalators |
Items specified in a lease such as base rent, operating expenses, and taxes that may increase by predetermined amounts at stated intervals or by a constant annual percentage. Also see index lease and expense stop. |
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Replacement cost |
The estimated cost to construct, at current prices, a building with utility equivalent to the building being appraised, using modern materials and current standards, design, and layout. |
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Residential property |
Single- or multifamily housing units that are used, serve, or are designed as a place of residence. |
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Retail gap analysis |
A gap analysis performed specifically on retail floorspace in a given market or trade area. |
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Retail gravity model |
A gravity model used to estimate dollar flows to or the sale/revenue potential of competing retail establishments in a given geographic market. Also see gravity model. |
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Retail property |
Properties used exclusively to market and sell consumer goods and services. |
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Retail trade area |
Also referred to as service area, is generally defined as the geographic or formal area from which a sustained patronage is attracted to support a retail center or establishment; the extent to which is determined by numerous factors including the site characteristics of the center or establishment, its accessibility, the presence or absence of physical barriers to movement, and general limitations imposed by driving time, congestion, and distance/separation. |
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Reversion value |
A lump-sum cash benefit that an investor receives or expects to receive upon the sale of an investment. |
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Risk |
The probability that actual cash flows from an investment will vary from the forecasted cash flows. |
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Safe rate |
The rate a low risk, liquid investment achieves. |
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Sale cost |
The brokerage commissions and fees, and any additional transaction costs that are incurred during the sale of the property. |
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Sale-leaseback |
A leasing and financing strategy in which a property owner sells its property to an investor, then leases it back. This strategy frees capital that otherwise would be frozen in equity. |
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Sales proceeds after tax |
The sale proceeds before tax minus the tax liability on the sale. |
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Sale(s) proceeds before tax |
The sale price minus the sale costs and the mortgage loan balance. |
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Sales comparison approach |
A way to determine market value by comparing a subject property to properties with the same or similar characteristics. |
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Sales comparison value |
An estimate of value derived by comparing the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison, and making adjustments to the sales prices of the comparable based on the elements of comparison. |
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Sales per square foot |
Sales revenue generated per square foot of retail floor space. |
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Sales potential |
The possible or expected revenue of a retail outlet as defined by conditions within the market or trade area and the forces of competition. |
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Sales price point of indifference |
The future reversionary value (sales price) that would make the present cost of leasing mathematically equal to the present cost of owning a property. |
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Sales volume |
The total amount of sales/revenue generated by a retail outlet or facility in a given time period. |
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Sample |
A subset of a statistical population (typically selected randomly). |
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Sampling |
The practice of obtaining a sample from a given statistical population. |
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Scale economies |
Cost reductions, savings, or advantages that come about from efficiency gains associated with increasing levels of production output or the increased size of an operation or system (as the average cost of production falls with increasing output or size). |
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Secondary source data |
Information obtained from second-party or archival sources. |
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Securitization |
The phenomenon of indirectly investing in real estate markets in ways that minimize risk (for example, investments made collectively with pooled money or the use of investment packages/funds, such as mortgage backed securities sold on the secondary financial market) as opposed to direct investments where investors own property or hold mortgages; a long-term trend that has had significant impact on real estate values. |
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Segmentation of formal regions |
The compartmentalization or division of formal regions into smaller geographic areas for the purpose of carrying out a more detailed market area analysis. |
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Sensitivity analysis |
The process of recalculating outcomes under alternative assumptions to determine the impact of the variable under analysis. |
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Service area |
The geographical area that encompasses/delineates the principal share of clients or customers served by the tenants of the property (a concept that becomes less applicable as the service area of the customer base increases). |
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Sinking fund |
A fund designed to accumulate a designated amount of money over a specified period of time. The periodic amount of money deposited plus compound interest will accumulate to the designated amount of money over the specified period of time. |
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Site analysis |
The identification and evaluation of a site or sites to satisfy a given use or objective. |
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Site factors |
Site-specific factors, features, conditions, or attributes which are important in the analysis or evaluation of a location/site (including relative location, visibility, aesthetics, landscaping, condition of existing structures, regulatory mechanisms, and lot size). |
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Site selection |
The process of determining the best site for a specific use. |
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Space market |
The supply and demand for the use of physical space. |
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Standard deviation |
A measure of the amount of dispersion or variation of data points or values about the mean. The standard deviation has a very useful property in that 95.4% of the values of a data set will lie within two standard deviations (plus or minus) of the mean. |
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Standard Industrial Classification (SIC) |
A classification scheme used for general recording purposes by government and industry to categorize and account for economic and employment activity by sector using a series of standardized and universally accepted codes. |
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Statistical descriptions |
Drawing a reasonable conclusion or deduction from statistical evidence based on sample statistics, while attaching a statement as to the likelihood that an assertion made about a given statistical population is true (in probabilistic terms). |
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Statistical population |
The total set of elements or the collection of all individuals, items, or objects under consideration in a statistical inquiry. In short, a population is a universe comprising all members of a specified group. |
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Step-up lease |
A lease in which the rental amount paid by the lessee increases by a preset rate or set dollar amount at predetermined intervals. A step lease is a means for the lessor to hedge against inflation and future maintenance or operational expenses. |
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Street-based mapping |
Relatively easy-to-use GIS applications that allow the user to map objects such as commercial properties or retail establishments by street address. |
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Sublease |
A lease in which the original tenant (lessee) sublets all or part of the leasehold interest to another tenant (known as a subtenant) while still retaining a leasehold interest in the property. Also known as a sandwich lease due to the sandwiching of the original lessee between the lessor and the subtenant. |
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Submarket |
A segment or portion of a larger geographic market defined and identified on the basis of one or more attributes that distinguish it from other submarkets or locations. |
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Substitute basis |
The basis in a property acquired in a qualified Section 1031 Exchange is reduced by deferred gain and becomes the substitute basis. For example, if the market value of property given up is $200,000, and the basis in that property was $75,000, then realized gain equals $125,000. Assume the market value of property acquired through a tax- deferred exchange is $350,000, then subtracting the unrecognized gain of $125,000 equals the substitute basis of $225,000. The effect of this adjustment to basis is to build in the deferred $125,000 gain into the property acquired. If the new property were sold the next day for $350,000, a $125,000 gain would be reported. |
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Sunk costs |
Investment costs that are committed and cannot be recovered. |
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Superregional center |
A retail property type similar to regional centers, but because of its larger size, a superregional center has more anchors, a deeper selection of merchandise, and draws from a larger population base. As with regional centers, the typical configuration is as an enclosed mall, frequently with multilevels. |
