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The amount of inventory or units of a specific commercial property type that become occupied during a specified time period in a given market, typically reported as the absorption rate.
A term used by the Securities and Exchange Commission (SEC) under Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided by certain government filings. Accredited investors include individuals, banks, insurance companies, employee benefit plans, and trusts.
In order for an individual to qualify as an accredited investor, he or she must accomplish at least one of the following:
- earn an individual income of more than $200,000 per year, or a joint income of $300,000, in each of the last two years and expect to reasonably maintain the same level of income.
- have a net worth exceeding $1 million, either individually or jointly with his or her spouse.
- be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
The amount left over after subtracting the amount paid from the amount owed.
A request made to existing equity owners for additional money in order to fund deficits due to construction or operating costs, if cash flow is not otherwise deemed sufficient to do so.
The periodic required payments of principal and interest due on a loan.
The interest or value that an owner has in a property that is over and above the mortgage or other liens against it.
The process of evaluating a proposed project to determine if that project will satisfy the objectives set forth by the investors involved.
An evaluation of the difference in the demand and supply of space for a particular type of commercial property in a given market area where gaps are expressed as the amount of square footage demanded less the amount of square footage available in a given period of time.
Protecting oneself against negative outcomes.
An asset that is not readily convertible to cash.
The use of borrowed funds to finance a portion of the cost of an investment.
The date upon which a loan must be paid in full.
Net operating income
The potential rental income plus other income, less vacancy, credit losses, and operating expenses.
The actual dollars paid out by the tenant to occupy the space. It can be expressed in either pre-tax or after-tax dollars.
Cash outlays necessary to operate and maintain a property. Examples of operating expenses include real estate taxes, property insurance, property management and maintenance expenses, utilities, and legal or accounting expenses. Operating expenses do not include capital expenditures, debt service, or cost recovery.
A loan secured by real property, with a stated interest rate that also provides for a share to the lender in annual net cash flow, gain on sale, or proceeds from refinancing the property.
The public official who keeps records of documents concerning real property that are used to show evidence of title.
Securities and Exchange Commission
The U.S. Securities and Exchange Commission is an agency of the United States federal government.
The right to the ownership and possession of any item that may be legally recognized as belonging to someone or something. In its most basic sense, title is the recognition of ownership.
A real estate property categorization, or investment “style” referring to properties requiring some degree of improvements in order to gain increased returns.
A measure of investment performance that gauges the percentage return on each dollar invested.
The designation of specific areas by a local planning authority within a given jurisdiction for the purpose of legally defining land use or land use categories.