Brokerage
In commercial real estate, this document gives a broker the exclusive right to lease or sell a property on behalf of the owner.
What is an Exclusive Listing Agreement?
This of the three valuation approaches is most commonly used for unique properties like schools or churches where "comps" are rare.
What is the Cost Approach?
This figure tells a manager how full a commercial building is.
What is an Occupancy Rate?
Before breaking ground, developers must obtain this government approval confirming the project matches local land use rules.
What is Zoning Approval?
This ratio, the most important for commercial lenders, is calculated by dividing Net Operating Income (NOI) by the annual Debt Service.
What is the Debt Service Coverage Ratio (DSCR)?
A brokerage earns money when a deal closes. This percentage-based payment, usually split between buyer's and seller's agents, is called what?
What is Commission?
This professional designation, offered by the Appraisal Institute, is considered the "gold standard" for commercial appraisers.
What is MAI (Member of the Appraisal Institute)?
What is one property management company that we have had come in this semester or the prior semester?
What is University City Housing?
Developers model projected costs, rents, and returns in this financial analysis tool to determine if a project is worth building.
What is a Pro Forma?
This penalty is charged to a borrower if they pay off their loan early, often calculated via "yield maintenance."
What is a Prepayment Penalty?
Commercial brokers often work one of two sides of a deal. The broker representing the tenant looking for office or retail space holds this role.
What is Tenant Rep Broker?
The four tests for "Highest and Best Use" are: Physically possible, Financially feasible, Maximally productive, and this.
What is Legally Permissable?
In this common commercial lease structure, the tenant pays base rent PLUS property taxes, insurance, and maintenance costs directly.
What is a Triple Net Lease?
This document, issued by a local government, officially allows a building to be occupied after construction is complete.
What is a Certificate of Occupation?
If a property is valued at $10 million and the bank provides a $7.5 million loan, this is the LTV.
What is 75%
This acronym refers to the four major commercial property types: Office, Industrial, Retail, and this fourth category that includes apartments.
What is the formula to calculate the value of a property using income approach?
What is Income / Cap Rate = Value?
These costs are the funds a landlord provides to a tenant to build out or customize their space.
What are Tenant Improvements (TIs)?
A developer may use this short-term, high-interest loan to finance construction, which is paid off once the building is complete and refinanced.
What is a Construction Loan?
This type of "gap" financing sits between the senior mortgage and the equity in the capital stack.
What is Mezzanine Debt?
A commercial broker packages financials, rent rolls, and market data into this marketing document to attract potential buyers or tenants.
What is an Offering Memorandum (OM)?
Which City and State have no zoning laws?
Where is Houston, Texas?
This clause in a lease allows a landlord to pass through increases in operating expenses to the tenant after a certain "base year."
What is an Escalation Clause?
This "Hard Cost" refers to the money set aside in a development budget to cover unforeseen expenses during construction.
What is a Contingency?
This type of loan is "non-recourse" and is pooled together with other loans to be sold as bonds to investors.
What is CMBS (Commercial Mortgage-Backed Securities)?