Global Definitions Database

Tactical Investment Decisions

Investment decisions made with a focus on short-term planning and implications.

Tag-Along Rights

A contractual obligation used to protect a minority shareholder; if a majority shareholder sells its stake, then the minority shareholder has the right to join the transaction and sell its minority stake in the company.

Target percentage non-income producing investments

The target percentage of investments in non-income producing investments with the aim of generating future income after (re)development, refurbishment or re-letting activities. Note: Income producing investments are investments in assets for which construction work has been completed and which are owned for the purpose of letting, producing a rental income that is negotiated at arm’s length with third parties. Non-income producing investments are investments in assets (either properties or land) that at the time of investment are not producing any rental income and for which either (re)development, refurbishment or re-letting activities have to be undertaken before rental income is possible.

Target percentage of (re)development exposure

The percentage of overall vehicle target GAV at any point in the life of the vehicle. Development exposure includes any development or redevelopment activities but excludes refurbishment.

Target return derived from income

Percentage of target return derived from rental income that a vehicle is able to pay out on an annual basis.

Tax Bracket

A range of incomes subject to a certain income tax rate; results in a progressive tax system, in which taxation progressively increases as an individual's income grows.

Tax effect of the adjustments

An adjustment representing the tax impact on NAV of certain specified adjustments if not already taken into account in the adjustment of deferred taxes.

Tax Efficiency

The process of organizing an investment so that it receives the least possible taxation.

Tax Shelter

The ability of real estate investments to reduce an investor’s tax liability through the use of cost recovery.

Tax-Exempt Investor

An investor, or any investor that is a flow-through entity for US federal income tax purposes that has a partner or member, that is exempt from US federal income taxation under Section 501(c) of the Internal Revenue Code (IRC) of 1986, as amended; generally are not subject to US taxation, but they may be required to pay taxes on unrelated business taxable income (UBTI); examples include pension plans, universities, private foundations, and charitable endowments.

Taxable REIT Subsidiary (TRS)

A corporation that is owned directly or indirectly by a REIT and has jointly elected with the REIT to be treated as a TRS for tax purposes; may provide services other than customary services to tenants of the REIT's property without disqualifying the amounts received by the REIT from treatment as rents from real property.

Taxes on property related activities

Taxes assessed against real property, usually by a country or municipal taxing authority but sometimes also by special purpose districts and agencies, in proportion to the assessed value of the property. Franchise taxes and excise taxes are already included in the NAV, and thus should be excluded.

Tear Sheet

With reference to marketing:  a page torn from a publication to prove to a client that an advertisement has been published; With reference to finance:  a short summary of key information about individual companies or funds.

Tenant Finish Allowance

A negotiated sum a landlord is willing to spend to customize space for the needs of a particular tenant; also known as a “tenant improvement allowance” or “upfit”.

Tenant Improvement Allowance

A negotiated sum a landlord is willing to spend to customize space for the needs of a particular tenant; also known as a “tenant finish allowance” or “upfit”.

Tenant Improvements

Preparation of leased premises prior to or during a tenant’s occupancy, which may be paid for by either the landlord, the tenant, or both.

Tenant Mix

The selection and location of retail tenants to maximize the property’s income and stimulate business in general.

Term

The length of time, usually years, that an investment Vehicle (such as a fund), or loan is expected to exist, prior to any extensions.

Terminal Capitalization (Cap) Rate

The estimated or actual cap rate used to estimate the resale value of a property at the end of the holding period; calculated by dividing the expected net operating income (NOI) by the expected sale price and expressed as a percentage; also known as the “exit cap rate” or “residual cap rate”.

Terminal Value

The present value at a future point in time of all future cash flows assuming stabilization of cash flows; most often used in multi-stage discounted cash flow analysis and allows for the limitation of cash flow projections to a several-year period.

Termination Clause

A clause defined within the Vehicle Documentation that, when exercised, can lead to the termination of the agreement between the members and the Vehicle or the termination of the Vehicle itself.

Termination Date

The date the Vehicle is scheduled to liquidate, per the Vehicle's Documentation, or if such information is not identified within the legal documents, then the anticipated termination date agreed by investor and Investment Manager.

Terrorism Risk

The risk of potentially extreme losses as the result of the unlawful use of force and violence against persons or property to intimidate or coerce a government, the civilian population, or any segment thereof, in furtherance of political or social objectives.

Tertiary Trade Area

A geographic area containing the customers of a particular firm or group of firms for specific goods or services; includes customers not found in primary and secondary trading areas; these are the most widely dispersed customers.

Theme / Festival Center

Anchored by restaurants or other entertainment facilities, and oriented toward leisure and tourist-oriented goods and services. Typically 80,000 to 250,000 square feet.

TIF Notes

"TIF" or Tax Incremental Financing is a public financing method used for redevelopment infrastructure and other city improvement projects. This type of financing uses future gains in taxes to subsidize current improvements that are projected to create those gains.

Time-Weighted Return (TWR)

The geometric average of the holding period yields to an investment portfolio (Investment Analysis and Portfolio Management, Seventh Edition (2003)). TWRs are commonly used in the investment industry to measure the performance of an entity (e.g. fund, investment, property). The TWR formulas isolate the performance of the entity by removing the timing effect of cash contributions and distributions from the entity's ending fair value. TWRs measure performance over a specific period regardless of the size of the investment or timing of external cash flows.

Time-Weighted Return (TWR) (Fund Level)

A fund level TWR (also referred to as account or portfolio level) is the aggregation of all of the investments made by the entity and the amounts earned or incurred which relate to the entity but are not specifically attributable to a particular investment. Similar to investment level returns, the fund level TWRs are very broad in nature and try to capture all activity, which includes, but is not limited to, those revenues and expenses applicable to the fund, taken as a whole, such as audit and appraisal fees, interest income and portfolio borrowings. In essence, this return measures the performance of the advisor in terms of how well the management team performed its specified strategy.

Time-Weighted Return (TWR), investment level

Investment level TWRs reflect the performance of a single investment or group of investments, whether that investment is wholly-owned or a joint venture. Investment level TWRs differ from property level in that the full scope of the investment, including ownership level activity (use of working capital, owner expenses, etc.), is included in the calculation.

Time-Weighted Return (TWR), property level

Property level TWRs reflect the performance of an operating property or group of properties. The property level relates strictly to property operations and attempts to strip out all ownership level activity, usually including advisory fees, use of working capital and owner income and expenses. As such, property level TWRs do not represent investors' earnings from those properties, even in single property funds, but rather the earnings (in the form of appreciation and operating income) that are generated by the property.

Top-Down Investing

An investment approach that focuses on the macroeconomic analysis of various economic factors to understand how these factors may affect the overall market and investments.

Topography

The physical characteristics of the contour of a parcel of land; details the nature and variation of the surface of land which might be level, rolling or mountainous; may document the influence of issues such as ease of access, runoff and flooding hazards as well as availability of land for development in naturally constrained markets.

Total capital commitment drawn

Total capital drawn down since inception less total returned capital recalled since inception. This relates to the amount of actual capital commitment that has currently been drawn, net of any reinvested capital. This amount cannot therefore exceed total capital commitments.

Total capital commitments (By all investors)

Total capital commitments refers to the total committed capital a manager can draw down from all investors with a specified notice as outlined in the constituent fund documents.

Total capital drawn down

The capital (including shareholder's loans) injected by investors so far, including any returned capital that has been reinvested. The total can therefore exceed investors' total commitment. This does not reflect any returned capital that has been distributed.

Total current outstanding capital

The total capital drawn (including investment in both shareholder equity and shareholder loans, where applicable) less total return of capital (both recallable and non-recallable). Return of capital does not include income distributions.

Total debt maturities

Nominal value of debt maturing over a pre-determined amount of time, in the form of loans and excluding hedging debt.

Total direct GHG emissions

Direct GHG emissions come from sources that are owned or controlled by the fund manager. All direct emission sources are classified as scope 1 under the GHG Protocol.

Total indirect GHG emissions

Indirect GHG emissions are those that are a result of the activities of the fund, but that occur at sources owned or controlled by another entity. Indirect emission sources are classified as either scope 2 or scope 3 under the GHG Protocol.

Total return (net and unlevered)

Time-weighted net and unlevered return.

Total return net to investor

This uses as a numerator the aggregate of the cash flows used in the calculation of the gross IRR of a vehicle with respect to realized investments and as a denominator the total equity invested in respect of those same realized investments.

Total return of capital

Represents inception-to-date Return of capital. 

Total returned capital recalled

Represents a portion of inception-to-date investment proceeds paid back to investors and subsequently reutilised via a Capital call notice. 

Total Value to paid in capital multiple (TVPI)

See Investment Multiple

Tracking Error

A measure of the risk in an investment portfolio that is due to active management decisions made by the portfolio manager; indicates how closely a portfolio follows the index to which it is benchmarked; calculated as the standard deviation of difference in returns for fund or portfolio versus benchmark.

Trade Area

A geographic area containing the customers of a particular firm or group of firms for specific goods or services.

Traffic Count

A count of vehicular or pedestrian traffic utilized for analytical purposes.

Transaction Document

This incorporates all transaction related documentation, and is wider than just the Facility Agreement.

Transaction Obligor

This includes entities in addition to the Obligors which are required to comply with, or whose actions are intended to be controlled by, the Facility Agreement – e.g. a Shareholder or a Subordinated Creditor.

Transaction offsets

Transaction offsets occur typically if income, based on investment and not for specific services (e.g. closing or monitoring fee), is earned by the investment manager or management company of the vehicle from the portfolio properties, and a portion of that income is required to be offset against the management fee by the vehicle documentation.

Transfer agent costs

Costs charged by trustees who are responsible for managing the assets owned by a trust for the trust’s beneficiaries. This is most relevant in a REIT structure where trustees act on behalf of all unit holders.

Transferee

A person who receives property being transferred or conveyed.

Transferor

A person who makes a transfer or conveyance of property.

Transition Risk

The risks associated with the transition to a low carbon economy. The components of transition risks include regulatory and legal risk and broader commercial environment within which the asset/investment exists and operates, such as technology risk, market risk (under transactional risk) and corporate reputation risk. (In line with TCFD Definition) 

Transparency

The extent to which investors have ready access to required financial information about a company or investment, such as price levels, market depth and audited financial reports.

Treynor Ratio

A risk-adjusted measurement of return based on systematic risk; indicates how much return an investment earned for the amount of risk the investment assumed.

Triple Net Lease (NNN)

A lease that requires the tenant to pay all expenses of the property being leased in addition to rent; typical expenses covered in such a lease include taxes, insurance, maintenance, and utilities.

Trustee Costs

Also known as Placement Agent Costs

Truth in Securities Law

A US federal law designed to protect investors after the stock market crash of 1929; requires that investors receive financial and other significant information concerning securities being offered for public sale and prohibits deceit, misrepresentations, and other fraud in the sale of securities; also known as the “Securities Act of 1933”.

Turn Key Project

The construction of a project in which a third party is responsible for the total completion of a building, or for the construction of tenant improvements to the customized requirements and specifications of a future owner or tenant.