Contracts, regulations, compliance, entity structures, zoning, permits, and landlord-tenant law.
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Foundation terms you need to know first (89 terms)
Development costs are all the expenses incurred during the process of acquiring land, designing, constructing, and preparing a real estate project for use or sale, from start to finish.
Base rent is the fixed, minimum rent amount paid by a tenant to a landlord for the use of a property, excluding additional charges like operating expenses, taxes, or utilities.
An absolute auction is a type of real estate auction where the property is sold to the highest bidder, regardless of the price, with no minimum bid or reserve price set by the seller.
The Lease Commencement Date is the official date specified in a lease agreement when the tenant's rights and obligations, including rent payments and property responsibilities, legally begin.
An application fee is a non-refundable charge paid by a prospective tenant to a landlord or property manager to cover the costs associated with processing a rental application, including background and credit checks.
Complex strategies and professional concepts (104 terms)
An Equity-for-Property Swap is an advanced real estate investment strategy where an investor exchanges equity in one or more properties or entities for direct ownership of another property, often to achieve tax deferral, portfolio restructuring, or strategic asset acquisition.
The accounting process of recognizing the estimated cost of an Asset Retirement Obligation (ARO) as a liability and capitalizing a corresponding asset, which is then depreciated over its useful life, reflecting the future costs associated with retiring a long-lived asset.
A legally binding contract that alters the priority of liens on a property, allowing a senior lienholder to voluntarily place their claim in a junior position to another, typically to facilitate new financing or complex transactions.
Unrelated Business Income Tax (UBIT) is a tax levied on the net income of a tax-exempt organization, including certain real estate investment vehicles, derived from a trade or business regularly carried on and not substantially related to its exempt purpose.
Inverse condemnation is a legal action initiated by a private property owner against a government entity to recover "just compensation" for a taking of their property, where the government has not formally exercised its power of eminent domain but has effectively deprived the owner of beneficial use or value.
A Business Credit Report details a company's financial reliability and payment history, influencing its ability to secure commercial loans and favorable terms for real estate investments.
A numerical assessment of a company's creditworthiness, reflecting its ability to manage financial obligations and repay debts, distinct from personal credit scores.
Buyer's premium is an additional fee charged to the winning bidder in an auction, calculated as a percentage of the final winning bid and added to the total purchase price.
Bylaws are a set of fundamental rules and regulations that govern the internal affairs, management, and operational procedures of an organization, entity, or association in real estate.
A C Corporation is a legal entity separate from its owners, subject to corporate income tax on its profits, and then again to personal income tax when profits are distributed to shareholders as dividends.
A Commercial Mortgage-Backed Security (CMBS) loan is a form of commercial real estate financing where multiple commercial mortgages are pooled, securitized into bonds, and sold to investors, offering non-recourse debt for large-scale properties.
A capital account tracks an investor's equity stake in a real estate partnership or LLC, reflecting contributions, distributions, and their share of profits or losses.
A capital call is a formal request by a fund manager for investors to contribute a portion of their previously committed capital to an investment fund or syndication, typically to fund new acquisitions or project expenses.
A capitalization table, or cap table, is a detailed record of a company's or real estate project's equity ownership, including who owns what, the type of equity, and their respective ownership percentages.
The accounting process of recognizing the estimated cost of an Asset Retirement Obligation (ARO) as a liability and capitalizing a corresponding asset, which is then depreciated over its useful life, reflecting the future costs associated with retiring a long-lived asset.
Carried interest is a share of the profits of an investment fund, typically a private equity real estate fund or syndication, paid to the general partners (GPs) or managers after limited partners (LPs) have received their initial capital and a preferred return.
Cash for Keys is a voluntary agreement where a landlord offers a tenant money to vacate a property quickly and amicably, often used to avoid the costly and lengthy formal eviction process.
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