Other Real Estate Industry Terminology

“Industrial absorption outpaced new deliveries this quarter.”; “We’re underwriting 60,000 sf of net absorption during lease-up.”; “Office absorption turned negative as sublease space increased.”

“We’re evaluating adaptive reuse of the mall into medical offices.”; “Adaptive reuse of warehouses to loft apartments has surged.”; “City incentives improve the adaptive reuse feasibility.”

“The REIT’s AFFO payout ratio fell to 74%.”; “Management guided to AFFO per share growth of 5%.”; “Bridge from FFO to AFFO includes recurring CapEx and TIs.”

“The grocer serves as the center’s anchor tenant.”; “Loss of the anchor triggers co-tenancy clauses.”; “An investment-grade anchor supports lower cap rates.”

“The lender ordered an MAI appraisal.”; “Appraisal value came in at a 6.0% cap.”; “We disputed the appraisal’s vacancy and expense assumptions.”

“Asset management approved the CapEx reforecast.”; “We’re pushing rents and renewing early to de-risk.”; “Quarterly asset management memos track KPI variances.”

“The BTS includes specialized manufacturing improvements.”; “We negotiated a 20-year BTS with 2% annual bumps.”; “Credit underwriting focuses on the BTS tenant’s covenant.”

“Trading at a 5.25% cap on T-12 NOI.”; “Exit cap assumed 50 bps above entry.”; “Tightening cap rates reflect strong investor demand.”

“Budget $1.5M CapEx for lobby and elevators.”; “We maintain a CapEx reserve of $0.30/sf/year.”; “CapEx-heavy plan targets a reposition to Class A.”

“An 80/10/10 capital stack improves equity IRR.”; “We filled the gap with mezz and pref.”; “Waterfall distributions follow the capital stack hierarchy.”

“Year 1 cash-on-cash is 7.2%.”; “Refi boosts cash-on-cash while reducing risk.”; “We target a minimum 8% cash-on-cash by stabilization.”

“The conduit loan will be securitized into CMBS.”; “B-piece buyers influence underwriting.”; “Defeasance required to prepay the CMBS loan.”

“Co-tenancy drops rent to percentage-only if the anchor leaves.”; “We negotiated a cure period for co-tenancy events.”; “Co-tenancy risk is priced into the cap rate.”

“CAM is reconciled annually with a 5% cap.”; “Tenant pays pro-rata share of CAM, taxes, and insurance.”; “We tightened CAM definitions to reduce leakage.”

“The refinance must hit 1.30x DSCR.”; “DSCR falls below the cash trap threshold.”; “Rising rates compressed DSCR on the floating loan.”

“We found unrecorded easements during diligence.”; “Lease abstracts revealed a hidden co-tenancy trigger.”; “Phase I ESA and PCA are in the due diligence scope.”

“We need a utility easement from the neighbor.”; “The REA limits changes to the site plan.”; “Access easements benefit both parcels.”

“Entitlement risk warrants higher returns.”; “We secured a height variance and site plan approval.”; “Entitlements extend the pre-development timeline.”

“Phase I ESA flagged a recognized environmental condition.”; “We scoped soil borings for the Phase II.”; “Lender requires a clean ESA to close.”

“2.5% annual rent escalations are market.”; “CPI + 1% cap at 4% per year.”; “Base-year stops plus escalations improve NOI growth.”

“Upzoning increased FAR from 3.0 to 5.0.”; “We’re maxing FAR with a podium-and-tower design.”; “Air rights were transferred to boost FAR.”

“GLA is 215,000 sf across 24 suites.”; “We recaptured space to increase GLA.”; “GLA changes alter CAM allocations.”

“It’s a 99-year ground lease with CPI bumps.”; “We’re underwriting reversion risk on the ground lease.”; “Ground rent is senior to mortgage payments.”

“Hard costs escalated 9% year-over-year.”; “GMP contract shifts hard cost risk to the GC.”; “We value-engineered to reduce hard costs.”

“HBU analysis supports multifamily over office.”; “Parking constraints limit HBU density.”; “Entitlements changed the HBU conclusion.”

“We target a 15% levered IRR.”; “Promote kicks in at a 12% IRR hurdle.”; “Sensitivity shows IRR drops 200 bps if exit cap expands.”

“The abstract flagged a restrictive exclusive use.”; “Abstracting 120 leases before closing.”; “Abstract shows free rent and TI obligations.”

“We underwrote a 12-month lease-up.”; “Leasing velocity beats the pro forma.”; “Marketing spend is front-loaded to accelerate lease-up.”

“LOI includes rent, term, TI, and exclusives.”; “We executed an LOI subject to credit approval.”; “Competing LOIs helped improve economics.”

“Bridge loan at 65% LTV.”; “Lower LTV improved the debt coupon.”; “Valuation drop pushed LTV above covenanted levels.”

“We filled the gap with mezz at SOFR + 850.”; “Intercreditor limits mezz enforcement rights.”; “Mezz prepayment requires senior lender consent.”

“Drugstore trades at a 5.75% NNN cap.”; “NNN structure stabilizes landlord cash flow.”; “Tenant handles roof and structure under absolute NNN.”

“Stabilized NOI of $6.2M supports pricing.”; “Focus CapEx on initiatives with NOI uplift.”; “NOI margin improved 300 bps post-reposition.”

“At 10% discount rate, NPV is positive $2.1M.”; “NPV turns negative if rents decline 5%.”; “We rank projects by risk-adjusted NPV.”

“OpEx came in 4% under budget.”; “We audited OpEx to reduce leakage.”; “Green upgrades lower OpEx and improve NOI.”

“We deployed PropTech sensors for energy management.”; “PropTech platform streamlined work orders.”; “AI valuation tools are reshaping underwriting.”

“We secured non-recourse debt with bad-boy carve-outs.”; “Partial recourse burned off at stabilization.”; “Sponsor guarantee converted to limited recourse.”

“Rent roll shows 18% rollover next year.”; “We verified rent roll against estoppels.”; “Rent roll highlights below-market rents.”

“We executed a sale-leaseback at a 6.8% cap.”; “The leaseback is NNN with 2% annual bumps.”; “Proceeds fund core business growth.”

“We identified three 1031 replacement properties.”; “Qualified intermediary holds proceeds in escrow.”; “Boot would trigger taxable gains—structure to avoid it.”

“Tenant required an SNDA from the new lender.”; “SNDA protects occupancy if ownership changes.”; “We negotiated non-disturbance in exchange for subordination.”

“Loan priced at SOFR + 325 bps.”; “We purchased a SOFR cap at 3.5%.”; “Rising SOFR compressed DSCR.”

“Stabilized at 93% occupancy by month 18.”; “Stabilized NOI triggers the refi.”; “Cap rate applied to stabilized, not in-place NOI.”

“$45/sf TI for creative office buildout.”; “TI amortized as part of effective rent.”; “Work letter defines scope and delivery of TI.”

“We’ll close once the title policy is issued.”; “Endorsements cover survey and access.”; “A gap indemnity was required by the title company.”

“Underwriting assumes a 6.25% exit cap.”; “We stress-tested rent and vacancy.”; “Credit underwriting drove tighter covenants.”

“CBD vacancy hit 19%.”; “Pro forma assumes 7% stabilized vacancy.”; “Rising vacancy pressures effective rents.”

“Value-add plan includes lobby renovation and amenity upgrades.”; “We’re marking-to-market below-market leases.”; “The business plan targets a 300 bps NOI margin expansion.”

“8% pref, then 70/30 split up to a 12% IRR hurdle.”; “The GP promote steps up above 15% IRR.”; “Catch-up provision aligns incentives post-pref.”

“We’re pursuing a variance for reduced parking.”; “The board granted a height variance with conditions.”; “Variance risk extends the pre-construction timeline.”