Global Definitions Database

Access, learn and discover all terms related to the non-listed real estate sector.

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A

Acquisition

Purchase of an interest in an asset in exchange for consideration paid. View full definition

Appreciation

An increase or decrease in value of an asset. Appreciation may be attributable to improvement or deterioration in the financial performance of the asset or changes in the market value for the asset. View full definition

Asset Management Company

A legal entity that specialises in the tactical management of a vehicle's assets on behalf of the owner of the real estate. Services may include strategic input and production of asset level business plans, appointment of third party service providers at asset level as well as reporting activities at asset level. View full definition

Asset Manager

The tactical management of investments and their related properties, within an overall portfolio. The asset manager will commonly oversee the work of the property manager, manage the overall relationship with tenants, and develop and monitor specific business, investment and financial plans related to individual investments within a portfolio. View full definition

B

Base Rent Income

Income derived strictly from leased space, i.e., not including percentage rents which is a separate data field. View full definition

Brownfield

Land previously developed for other purposes that may not necessarily be available for immediate use without intervention (e.g. environmental contamination or existing buildings infrastructure to be demolished first). View full definition

Building types

Categorisation based on the function or form of a building for example: offices, shopping centres, retail warehouses, industrial, multi-family housing, hotels. View full definition

C

Capital expenditures (CAPEX)

Costs related to capital improvements for an asset that lengthen its life and increase its value. This is an addition to any maintenance operating expenses. View full definition

Community Center

In addition to convenience goods, provides for the sale of goods such as apparel or furniture. Typical area is 100,000 to 350,000 square feet with two or more anchor tenants. View full definition

Contingent Rent

It is a rental payment which is triggered by meeting a certain condition precedent defined in the lease agreement. View full definition

Cost Approach (valuation technique)

Based on the amount that currently would be required to replace the service capacity of an asset (often referred to as current replacement cost). View full definition

Cost of development portfolio

All costs paid up in relation to all assets under development. View full definition

D

Development

The process encompasses activities that range from preparation of an area of vacant land and installation of infrastructure to the construction of a property. Sometimes referred to as "ground up" development period. Development includes the predevelopment phase and generally involves risks such as leasing risk, permissions/entitlement risk, construction risk, financing risk and zoning risk. View full definition

E

Estimated Rental Value (ERV)

The current rent at which space within a property could reasonably be expected to be let given current market conditions. View full definition

Expansion

Extending an existing building via construction of additional space. View full definition

External leasing commissions

Commissions charged by the listing agent/broker and tenant representative after a new lease or a renewal lease is signed. These include marketing of vacant space. Commission ranges vary and may depend on the market and/or the value of the transaction. View full definition

F

Fashion / Specialty Center

Typically 80,000 to 250,000 square feet with no dominant anchors, consisting of higher-end fashion oriented tenants. View full definition

Flex Space (industrial)

Single story buildings with 10-18 foot ceilings with both floor height and dock height loading. Includes wide variation in office space utilization, ranging from retail and personal service through distribution, light industrial and occasional heavy industrial use. View full definition

Free Rent

A period of time during the lease term when the tenant is excused from paying rent. View full definition

G

Garden-type Apartments

Low-rise apartments situated on a sizable landscaped plot, under one management. View full definition

Greenfield

Land that has never been used or previously developed (i.e. natural and without improvements). View full definition

Gross Sales Price

The gross sales price received for a property sale before deduction for selling costs and expenses. View full definition

H

High-rise Elevator Apartments

Buildings that are four stories or more in height. View full definition

Highest and Best Use

The use of an asset by market participants that would maximize the value of the asset or group of assets within which the asset would be used. Highest and best use is determined based on the use of the asset by market participants, even if the intended use of the asset by the reporting entity is different. View full definition

I

Income Approach (valuation technique)

Uses valuation techniques to convert future amounts (for example cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. View full definition

Indexed Rent

A type of Contingent Rent as defined in the lease agreement that varies based on changing interest rates or a specified inflation index such as the Consumer Price Index (CPI), typically used to anticipate future effects of inflation. View full definition

Initial Leasing

Completed construction that is less than 60% occupied since the end of construction and has been available for occupancy for less than one year View full definition

Internal leasing commissions

Commissions charged by investment advisors, or managers, after a new lease or a renewal lease is signed. These include marketing of vacant space. Commission ranges vary and may depend on the market and/or the value of the transaction. View full definition

Internal valuation

Internal valuation is a valuation carried out by a valuer who is employed by either the entity that owns the assets or a related company or manager. An internal valuer is generally capable of meeting all the requirements of independence and professional objectivity, but for reasons of public presentation and regulation may not always be acceptable to fill the role of an external independent valuer. View full definition

L

Lease Area

The area for which rent can be charged. View full definition

Low-rise Apartments

Walk-up buildings and elevator buildings three stories or less. View full definition

M

Manufacturing facility (industrial)

Buildings with 10-16 foot ceilings or sufficient height for overhead cranes. Provides floor height and dock height loading. View full definition

Market Approach (valuation technique)

The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. View full definition

Market Vacancy

Current vacancy rate for the market for the same property type. View full definition

Market Value

The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. (IVS, Eighth Edition, 2007, Standard 1.4.1 pg. 79 View full definition

N

Neighborhood Center (retail)

Provides for the sale of daily living needs of the immediate area. Typical area is 30,000 to 150,000 square feet with at least one anchor tenant. View full definition

Net Operating Income (NOI)

The gross operating income of a property for the period less operating expenses. NOI relates to the operating portfolio of the vehicle and not (re)development assets which are reported under 'other net income. View full definition

Net Sale Price

Gross Sales Price net of any selling costs and expenses, and before debt. Selling expenses are directly attributable to the sale which are the seller's responsibility including, but not limited to, items such as commissions, disposition fees, legal fees, title insurance, escrow fees, etc. View full definition

O

Offer price

The amount that an investor must pay (relative to NAV) if it wishes to subscribe to a vehicle. View full definition

Office Showroom

Single story (or mezzanine) with 10-16 foot ceilings with frontage treatment on one side and dock height loading or grade level roll-up doors on the other. Less than 15% office space. View full definition

Operational results

NOI plus other net income View full definition

Other net income

Non-recurring non-operating profit income, calculated by subtracting related operating expenses from the revenue of development projects and non-rental revenue. View full definition

Outlet Center

Typically 50,000 to 400,000 square feet of manufacturer's outlet stores, with a primary trade area radius of 25 to 75 miles. View full definition

P

Percentage Rent

A percentage of the tenant's total annual sales paid as rent. Percentage rent is normally paid after a predetermined sales level has been achieved. The percentage factor is then applied to all sales over the preset level (breakpoint). View full definition

Power Center

Typically 250,000 to 600,000 square feet with three or more anchor stores that occupy 75-90% of the total area. Anchor stores are "category-dominant" home improvement stores, discount department stores, warehouse clubs, and off price stores. View full definition

Predevelopment

Predevelopment is the initial stage of development. It generally includes activities pertaining to the preparation of a site or land parcel and infrastructure in anticipation of the development construction for specific usage including, but not limited to, acquisition of title or options to land, assessment of its surroundings, initial conceptual designs of the intended building, preparation for obtaining building rights and/or application for relevant governmental permits, resulting in the contractual development. View full definition

Property

A real estate asset. View full definition

Property Conversion

The process or act of changing a property type to a different property type. View full definition

Property Manager

The day-to-day management of individual real estate properties within a portfolio. Typical activities of a property manager include the invoicing and collection of rents and building maintenance. The property management responsibility can be either outsourced or insourced. View full definition

R

Redevelopment

The act or process of improving or changing a site with pre-existing conditions or land use type through (partial) demolition of the existing real property or infrastructure and replacing it with new or different construction or land use improvements, such as buildings, roads, or utilities with the purpose of increasing value. View full definition

Refurbishment

Renew or restore an existing building to a better technical condition and/or appearance. View full definition

Regional Mall

Provides a variety of goods comparable to those of a central business district in a small city, including general merchandise, apparel and home furnishings, as well as a variety of services and perhaps recreational facilities. Two or more full-line department stores anchor a total area of 400,000 to 800,000 square feet. View full definition

Reimbursement Income

Any payment made by tenants to reimburse the landlord for expenses. View full definition

Renovation

The process of improving, remodeling and/or rehabilitating a real estate asset in order to enhance its intended function, extend the period of usage and increase value and/or related cash flows. Sometimes referred to as “refurbishment”. View full definition

Replacement Costs

Expenditures that provides for the periodic restoration of building components that wear out more rapidly than the building itself and must be replaced during the building's economic life. View full definition

Repositioning

Changing the use of the building through a combination of renovations, improvements and use in order to change its market positioning, typically to add value to the property. View full definition

Research and Development (industrial)

One- and two-story buildings with 10-15 foot ceiling heights with up to 50% office/dry lab space (remainder in wet lab, workshop, storage, and other support), with dock height and floor height loading. View full definition

Reversionary income

The estimated increase in rent at next renewal/ review based on ERV. View full definition

Reversionary yield

The estimated rental value as a percentage of gross property value. View full definition

S

Self-Storage (facility)

Self-storage units. Single and multi-story, basic or climate-controlled. View full definition

Senior Living (facility)

Specialized housing designed specifically to accommodate the needs of senior citizens, but whose function is not primarily healthcare. Note: Senior Living facilities without medical care should be classified in the Apartments (A) property type. View full definition

Stabilisation

Stabilisation is a relative term and it is dependent on the condition to which it relates. When using this term, it is therefore important to specify the context (e.g. development, leasing/market conditions, a single property vs. entire portfolio, etc.), as this term carries a broad range of implications. For example, the conditional criteria can be applied individually or collectively to determine the stability status of construction, operations, occupancy level, net income generation, or financing arrangements. View full definition

Standing investment

Operational real estate assets that are completed and lettable and not in the course of, or held for, development. View full definition

Stepped Rent

A component of a lease agreement that is used to establish future rent increases or decreases at stated intervals during a longer-term lease agreement. Also known as “step rent”, “step-up rent” or “graduated rent”. View full definition

Super-Regional Mall

Provides an extensive variety of shopping goods comparable to those of the central business district of a major metropolitan area. The anchors are three or more full-line department stores, with total area in excess of 800,000 square feet. View full definition

T

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. View full definition

V

Vacancy (Based on estimated rental value)

Estimated rental income of vacant space / (contractual rental income of occupied space + estimated rental income of vacant space). View full definition

Vacancy (Based on leasable floor space)

A measure of the level of vacant space, which is calculated based on net leasable floor space. View full definition

Valuation

1. The process of determining the worth of an asset or a fund. 2. The result of that process: the estimated worth or sales price of an asset or fund. View full definition

Void rate

A measure of the level of vacant space, which is calculated based on floor space or estimated rental value. View full definition

W

Warehouse (industrial)

50,000 square feet or more with up to 15% office space, the balance being 18-30 foot ceiling height. All loading is dock height. View full definition

Weighted average lease expiry

Weighted average duration of lease contracts based on rent to the shorter of the first tenant break or lease expiry. View full definition