Multifamily
This term describes the percentage of units rented out at a given time.
What is occupancy?
This lease type requires the tenant to pay base rent plus its share of property taxes, insurance, and operating costs.
What is a triple net (NNN) lease?
A large retailer that draws foot traffic to a shopping center, usually at the center’s end, is called this.
What is an anchor tenant?
This shorthand valuation measure divides NOI by purchase price.
What is a cap rate?
Hyperscale data centers are typically built and operated by companies of this type.
What are big cloud and tech companies, like Amazon, Microsoft, or Google?
For most lending purposes, a residential building with this many units or more is treated as commercial multifamily rather than residential.
What is five?
This is the term for a lease in which the landlord passes most of the building’s operating expenses through to the tenant, with the tenant paying a base rent plus its share of costs.
What is a net lease?
Retail centers measure sales productivity using this metric, which is annual sales dollars divided by square footage.
What are sales per square foot?
Owners set aside this reserve to pay for big-ticket replacements like roofs and HVAC systems.
What is a capital reserve?
Data center capacity is most commonly measured in this unit of electrical power.
What is a megawatt (MW)?
Gross potential rent, minus vacancy and credit loss, plus other income, equals this figure.
what is effective gross income (EGI)?
Office buildings in this class are typically the newest, highest-quality properties in prime locations, and they command the top rents.
What is Class A?
In retail leases, this is the rent a tenant pays on top of base rent when its sales exceed a set threshold.
What is percentage rent?
A property with $600,000 in NOI trading at a 6% cap rate is valued at this amount.
What is $10 million?
This term describes a building with a clear height of at least 32 feet, a key specification for modern warehouse and distribution space.
What is a high-clearance or high-bay warehouse?
This ratio divides operating expenses by effective gross income.
What is the operating expense ratio?
Office buildings are often measured by this, which is the total space a tenant leases, including its share of common areas such as lobbies and hallways
What is rentable square footage?
Under a co-tenancy clause, if a key anchor tenant leaves, the other tenants may be allowed to do this.
What is pay reduced rent or terminate the lease?
This rate is used to discount future cash flows to their present value.
What is the discount rate?
Warehouses are commonly rated by this measure, which is the ceiling height from the floor to the lowest point of the roof structure, and buyers and tenants use it to judge storage capacity.
What is clear height?
Unlike a cap rate, which divides NOI by property value, this metric divides NOI by the loan amount. Lenders use it to size loans.
What is debt yield?
This metric combines base rent with the straight-lined value of concessions, such as free rent and tenant improvement allowances, over the lease term.
What is net effective rent?
This term describes outdoor industrial space, such as trucking yards and container storage, used without a building.
What is industrial outdoor storage (IOS)?
When a property’s levered return exceeds its unlevered IRR because borrowing costs are lower than the property’s return, this is called positive ___.
What is leverage?
Hyperscale tenants often sign this type of lease for a single facility, typically 10 to 15 years long, to secure capacity.
What is a long-term lease?