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23 Cards in this Set
- Front
- Back
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Closed-end fund
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an investment vehicle administered by an insurance company with a set # of shares in identifiable real estate
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Collateralized mortgage obligation (CMO)
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securities backed by large amounts of residential loans
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Commercial mortgage backed security (CMBS)
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RTC started by selling pools of commercial mortgages to investors through investment bankers & guaranteed the fund
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Commercial account
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an investment vehicle created for a group of outside investors who pool funds for real estate
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Direct or separate account
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an investment vehicle administered by an insurance company where funds can be placed in & drawn out by the individual investor
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Distributable cash flow
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the weighted average FFO (funds from operations) of a REIT distributed to pension funds. It may be a more stable income than the net income from real estate
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Employee Retirement Income Security Act (ERISA) of 1974
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was passed to regulate pension fund $ & allowed investment of pension funds into real estate
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Four-quadrant capital market
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public debt & equity capital, and private debt & equity capital in the financial markets
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Funds from operations (FFOs)
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the income line of a REIT which is net operating income adjusted for nonoperating income & expenses such as $ from business enterprise
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Initial public offering (IPO)
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of a REIT; an appraisal may be necessary as a part of the IPO, but afterwards the pricing of the securities is established in the open market & no appraisal of the real estate is required
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Market maker
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those knowledgeable as to who is buying & selling, and those who put deals together
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NCREIF Classic Property Index
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tracks the performance of properties acquired by tax-exempt institutions in all-cash transactions & are held in trust (fiduciary relationship)
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Open-end fund
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an investment vehicle administered by an insurance company that sells & redeems its shares continually like a mutual fund
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Partial interest
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an ownership interest other than complete ownership
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Real estate investment trust (REIT)
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pooled funds of small investors to buy or lend in real estate; generally a trust organized in Massachusetts. REITs are required to pay back 95% of income to shareholders & is a tax pass-through vehicle
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Real estate operating company (REOC)
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pooled funds of small investors to buy or lend in real estate; with publicly traded shares like REITs. However, th REOC, unlike the REIT, does not have tax pass-through & are not required to pay back 95% of its income
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Resolution Trust Corporation (RTC)
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a federal governmental agency established after the bank and S&L failures of the 1980's to manage real estate & other assets of the failed institutions
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Risk rating
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how a market perceives the risk of an investment and thus the price of the investment relative to expected returns
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Secondary market in commercial mortgages
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the market that buys & sells already originated commercial mortgages
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Securities & Exchange Commission (SEC)
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the federal government agency that regulates the securities markets
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Securitization
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converting ownership of real property interests in the form of securities or investment vehicles that issue securities
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Tax Reform Act of 1986
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IRS code as of 1986. The Act had an adverse affect on limited partnerships, taking away previous tax advantages. It also lengthened the cost recovery schedules of real estate assets from the previous 1981 Code.
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Tranche
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layering real property rights to sell off each individually
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