Global Definitions Database

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

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A

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

C

CFA Institute

The CFA Institute is a global not-for-profit association of investment professionals. The Institute awards the CFA (Chartered Financial Analyst designation). See www.cfainstitute.org. The Institute established and interprets the Global Investment Performance Standards (GIPS®). See www.gipsstandards.org. View full definition

Club Deal

Informal industry term used to describe an investment Vehicle or structure (often a fund) with generally a limited number of investors investing in a common strategy. Typically investors have more discretion and control than in a typical fund, and have veto rights over major decisions. View full definition

Composite

A composite is an aggregation of one or more portfolios into a single group that represents a particular investment objective or strategy. See www.gipsstandards.org. View full definition

D

Debt Service Coverage Ratio - DSCR (INREV)

Projected NOI over the following four quarters as a ratio of projected interest and scheduled amortization payments on bank (not shareholder) loans over the same period. This is a portfolio metric which may not reflect precisely the varying stipulations of each loan facility of the vehicle but which aims to give an indication of the vehicle’s general ability to service its debt; for the avoidance of doubt, the DSCR calculation does not take into account cash in bank. Calculation: DSCR = projected annual NOI for next four quarters / projected annual interest expense and amortization payments over next four quarters. View full definition

Debt Service Coverage Ratio - DSCR (RS)

Used to measure the amount of cash flow from the property/ investment's operations that is available to meet annual interest and principal payments on debt. A DSCR of greater than 1 would mean there is a positive cash flow and conversely less than 1 would imply a negative cash flow. View full definition

Discretion

Within the GIPS standards, discretion is the management company's ability to execute transactions and to make decisions regarding the vehicle's investments on behalf of the investors without their prior approval. There are degrees of discretion. However not all investor imposed restrictions or investor approval rights will necessarily cause a portfolio to be non-discretionary. GIPS describes a discretionary portfolio as one for which the investors have not imposed restrictions or requirements that impede the manager from fully executing the defined and approved strategy. View full definition

Distributions

Cash or other assets paid from the Vehicle to its investors as a share of income or gains from operations or a return of capital. View full definition

Dividend Payment

A form of Distribution as defined in the Vehicle’s Documentation. View full definition

E

Emerging Issues Task Force (EITF)

The Emerging Issues Task Force (EITF) was formed in 1984 in response to the recommendations of the FASB's task force on timely financial reporting guidance and a FASB Invitation to Comment on those recommendations. The mission of the EITF is to assist the FASB in improving financial reporting through the timely identification, discussion, and resolution of financial accounting issues within the framework of existing authoritative literature. See www.fasb.org/. View full definition

End of Investment Period

The end of the period as defined in the Vehicle documentation during which the vehicle can acquire assets. View full definition

End of maximum extendable vehicle term

The maximum vehicle termination date based on either pre-determined extensions at the discretion of the manager or extensions with advisory board or investor vote. View full definition

F

Fair Value Accounting Policy Manual

A consistent set of accounting standards for use when preparing financial statements for the institutional real estate investment community. View full definition

Final closing

As defined in the Vehicle Documentation, the date of the final closing occurs at the end of the equity raising period set by the investment manager when the Vehicle is closed to new commitments. View full definition

Fund

A Vehicle where capital is pooled together and managed as a single entity with a common investment objective. View full definition

Fund /Account(s)

Commingled Funds, both Open-end Funds and Closed-end Funds and Single Client Accounts View full definition

Fund Manager

See definition Investment Manager. View full definition

G

Global Investment Performance Standards (GIPS®)

The Global Investment Performance Standards are a set of standardized, industry-wide ethical principles that provide investment managers with guidance on how to calculate and report their investment results to prospective clients based on the principles of fair representation and full disclosure. The GIPS® standards are sponsored by the CFA Institute. The GIPS® standards (www.gipsstandards.org) are the Foundational Standards for performance within the Reporting Standards and INREV Performance Guidelines. View full definition

I

Initial Closing

As defined in the vehicle documentation, it is the date on which the conditions for the operating agreement are met for the initial closing. Generally, these conditions relate to subscription commitments. View full definition

INREV

INREV is the European Association for Investors in Non-Listed Real Estate Vehicles. The platform for sharing knowledge on the non-listed real estate industry to improve transparency, professionalism and best practices across the sector, making the asset class more accessible and attractive to investors. See www.inrev.org/. View full definition

INREV Guidelines

An integrated set of principles and recommendations including tools and examples for governance and information provision for investment managers and investors of non-listed real estate Vehicles. See www.inrev.org/. View full definition

Internal Rate of Return - IRR (INREV)

The annual rate of return based on the present value of a capital investment over a holding period expressed as a percentage of the investment. View full definition

Internal Rate of Return - IRR (RS)

The annualized implied discount rate (effective compounded nominal rate) that equates the present value of all of the appropriate cash inflows associated with an investment with the sum of the present value of all the appropriate cash outflows accruing from it and the present value of the unrealized residual investment. View full definition

International Financial Reporting Standards (IFRS)

A set of accounting standards, developed and maintained by the IASB with the intention of those standards being applied on a globally consistent basis thus providing investors and other users of financial statements to compare across their peers. See www.ifrs.org/. View full definition

International Valuation Standards Council (IVSC)

An independent, not-for-profit organisation that produces and implements universally accepted standards for the valuation of assets across the world in the public interest. See www.ivsc.org/. View full definition

Investee

A corporation, partnership or other legal entity or contractual arrangement in which an investor makes a direct investment. View full definition

Investment

A discrete asset or group of assets held for future income, appreciation, or both and tracked separately. View full definition

Investment Advisor

The role referring to activities related to the development and implementation of a strategic portfolio management function for a real estate investment Vehicle. This generally includes research and the development of a strategic plan, the identification and qualification of deal flow, financing and structuring advice and the monitoring of overall Vehicle performance. The Investment advisor can be a separate legal entity with a contractual relationship with an Investment Vehicle, or can be embedded within the activities of a Vehicle Manager. The role of the Investment Advisor is usually documented in an executed agreement between the client/investor and the Investment Advisor. View full definition

Investment level

Evident or applied only to the entire investment i.e.. e., "Investment-level debt" and "investment-level leverage". By contrast, "property-level" applies to characteristics of individual properties within an investment. View full definition

Investment Manager

The organisation responsible for the overall governance and oversight of the real estate investment fund or other type of investment Vehicles and may incorporate the Investment Advisor. The Investment Manager is ultimately accountable to investors for the overall management of the fund or Vehicle. This can be a formal role as defined by applicable regulation (e.g. the AIFMD), or legally such as the role of the General Partner in a partnership arrangement. Also known as Fund Manager, Vehicle Manager or Investment Advisor. View full definition

Investment Period

The period of time, as defined in the Vehicle Documentation, during the life of the Vehicle when the Vehicle can make investments. View full definition

L

Life Insurance Separate Account

Funds held by a life insurance company that is maintained separately from the insurer’s general assets. It is generally used for investing pension assets or variable annuity holdings. In the United States, the accounts are regulated by state insurance departments and may or may not be registered with the Securities and Exchange Commission. In Europe, the accounts are regulated by European Insurance and Occupational Pensions Authority (EIOPA) and regulators per country. View full definition

N

Number of assets

Number of assets as defined by the manager View full definition

P

Pension Real Estate Association (PREA)

PREA is a non-profit organization whose members are engaged in the investment of tax-exempt pension and endowment funds into real estate assets. PREA's mission is to serve its members engaged in institutional real estate investments through the sponsorship of objective forums for education, research initiatives, membership interaction, and the exchange of information. PREA is co-sponsor of the Reporting Standards. See www.prea.org. View full definition

Planned Liquidation Date

The specific date, as defined in the Vehicle’s Documentation, on which the Vehicle is expected to be liquidated and all residual equity returned to the investors. View full definition

Pooled Trusts

A multi-investor investment Vehicle which is legally structured as a trust. View full definition

Property

A real estate asset. 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

Redemption

The partial or full return of an investor’s equity by the Vehicle, at the investor’s request, at a pricing as defined in the Vehicle Documentation. View full definition

Reporting standards - handbook volume I and II

Reporting standards to promote transparent, consistent and meaningful performance, risk, accounting and valuation reporting for use of the institutional real estate investment community. The Reporting Standards are mainly used in the US and are co-sponsored by NCREIF and PREA. See www.reportingstandards.info. View full definition

S

Secondary Trade

A transaction whereby an existing investor transfers units or shares in a Vehicle directly to another investor (either a new investor, or one already invested in the Vehicle), based on pricing and terms agreed between the two parties, without the occurrence of new share/unit issue or redemption by the Vehicle itself. View full definition

Separate Accounts

A segregated investment account set up by a life insurance company which, through subaccounts, invests in the underlying mutual funds offered through a variable annuity or variable life insurance contract. The Separate Account assets are maintained separately from the insurance company's general account so they cannot be used to pay claims associated with any other business of the insurance company. Separate Accounts are regulated by state insurance departments and may or may not be registered with the Securities and Exchange Commission. View full definition

SFAS

A FASB Statement of Financial Accounting Standard. View full definition

Single Client Account

See definition Single Account. View full definition

Style

Describes the risk profile of the investment strategy adopted by an investment vehicle - there are three commonly used industry terms: core, value-added and opportunistic. View full definition

Subscription Agreement

A legally binding agreement made by an incoming investor with a Vehicle or its representative fixing the amount of the contributions paid, or to be paid, and the terms and conditions for investing in the Vehicle. View full definition

T

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. View full definition

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. View full definition

V

Vehicle

The overarching term for any kind of investment structure, including funds, joint ventures, club deals and separate or single accounts. View full definition

Vehicle Formation Date

The date on which the Vehicle was legally established and became available for investors. View full definition

Vehicle Manager

See definition Investment Manager. View full definition

Vehicle Reporting Currency

This is a denomination in which a Vehicleprepares and presents its financial statements and other financial information. View full definition