Book Index | Real Estate Finance and Investments: Risks and Opportunities, 5th Edition

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1

1980s – 79, 95, 123
1990s – 266, 267, 298, 307, 308

3

30/360 – 226

A

absolute priority rule – 209
accommodation fee – 360
accrual construction loan – 191, 393
accumulated depreciation – 258
Actual/360 – 226
Actual/365 – 226
additional rent – 46
Adjusted Funds from Operations (AFFO) – 200
adjusted NOI – 68, 122
AEW – 269
after-tax cash flow – 74
agglomeration economies – 106
Alfred Taubman – 52
amortization – 232
amortization schedule – 232, 239, 386
anchor – 18
anchored – 18
ancillary income – 57, 60, 180
Angelo Gordon – 269
annuity factor – 386
Apollo – 269
appraisal – 227
appurtenant easement – 99
assessed tax value – 62
asset management – 33
assumption of loan – 102
assumptions – 85

B

bad debt – 61
balloon payment – 232, 386
bankruptcy – 33, 54, 101, 171, 172, 199, 207, 208, 209, 210, 412, 414, 416
base rent – 46, 58
base rent escalations – 46
base year – 47
before-tax levered cash flow – 74, 75
Black-Scholes – 175
Blackstone – 269
British property companies – 199
brokerage commissions – 95
brownfield – 17
bulk warehouses – 23
bullet loan – 384, 387
bullet payment – 384

C

CAM costs – 59, 62
Canary Wharf – 209
cap rate – 38, 39, 40, 68, 79, 95, 97, 120, 121, 122, 123, 124, 125, 126, 127, 130, 131, 132, 134, 135, 136, 137, 138, 139, 141, 145, 146, 148, 149, 151, 153, 154, 155, 158, 159, 160, 161, 163, 164, 178, 201, 202, 204, 205, 218, 219, 220, 221, 252, 253, 279, 282, 283, 286, 289, 291, 372, 375, 400, 401, 407, 408, 409, 410, 442, 445
cap rate valuation – 120, 121
capital and leasing costs – 67
capital appreciation – 213, 214, 215, 219, 220, 221, 222, 223
capital asset pricing model (CAPM) – 145
capital call – 267
capital costs – 48
capital cycle – 352
capital expenditure reserves – 67, 102
capital expenditures (cap ex) – 68, 70, 76, 194, 197
capital gains taxes – 205, 234, 258, 260, 262, 299, 300, 301, 302, 307
capital items – 67
capital structure – 212, 214, 216
capitalized interest – 393
Carlyle – 269
carried interest – 269
Cash Available for Distribution (CAD) – 200
cash flow cap rate – 130
cash flow distribution waterfall – 269, 285
cash flow return – 213, 218, 402
cash sweep – 233
cash-on-cash yield – 219
catch-up – 278, 285
C-corporations – 302
central business district (CBD) – 24
Cerberus – 269
certificate of occupancy (C of O) – 169
chaebols – 38
Chapter 11 bankruptcy – 207, 208
Chapter 7 bankruptcy – 207
chevron – 24
Class A – 24, 25
Class B – 24, 25
Class C – 24
claw-back – 278
clear height – 22
climate-controlled – 29
Colony – 269
Commercial Mortgage Backed Security (CMBS) – 238, 239, 240, 243, 245, 248, 412, 416, 417, 418
common area maintenance (CAM) – 20, 47, 59, 64
common areas – 47
community retail center – 19
comparables (comps) – 97
compound return – 365
compounded annual growth rate (CAGR) – 215
compounding – 365
condominiums – 25, 165, 171
conduit loan – 412
constant amortization loan – 392
construction loan – 191, 393
contingency reserve – 190
convertible debt – 222
corporate general and administrative (G&A) expense – 194
cost amortization – 77
cost recoveries – 45, 59
cost segregation analysis – 73
co-tenancy clause – 53
cram down rule – 209
credit loss – 61
Crow Holdings – 269
cure loan delinquency – 206
currency hedge – 43
currency risk – 38, 42, 43
current-pay interest – 393

D

debt financing – 74
debt service coverage ratio (DSCR) – 90, 228, 412, 415, 418
debt service expense – 75, 90, 197
debt yield – 227
debtor in possession (DIP) financing – 208
defeasance – 236
deficiency claim – 209
demographic analysis – 103
depreciable life – 71
depreciable value – 71
depreciation – 70, 71, 76
development feasibility analysis – 178
development overhead – 168
direct vacant space – 25
discount factor – 367
discount rate – 123, 367
discounted – 371
discounted cash flow analysis (DCF) – 2, 120, 121, 122, 123, 125, 201, 202, 251, 252, 364, 371, 372, 374, 375, 376
disposition (sale) – 95, 258
distressed loan investor – 207
distributions – 229, 270
double taxation – 302, 304
downtown shops – 20
draw request – 231, 393
dropped ceilings – 22
due diligence – 98

E

easement – 99
EBITDA – 197, 201
economic occupancy – 33
efficiency – 30
eligible loan cost – 227
encumbered – 99
equitization – 140
equity IRR – 381
equity multiple – 84, 164, 267, 283, 294, 314
equity REIT – 298
equity value – 371
estoppel certificate – 98
excess loan proceeds – 234
exit cap rate – 95
expansion rights – 51
expense reimbursements – 59
expense stops – 47
extended stay hotel – 28

F

fee simple ownership interest – 249, 250, 251, 252, 253, 254
financial modeling – 84
fixed charges ratio – 228
fixed operating expenses – 45, 90
fixed rate loan – 226
fixed-rate fusion pool – 412
flex building – 22
floating rate loan – 226
floor area ratio (FAR) – 31, 186
floorplates – 24, 25, 30
foreclosure – 141, 207, 209, 210, 217, 228, 249, 250, 416
free rent – 33, 48, 49, 88
FSI (Floor Space Index) – 31
full service hotel – 28
fully-amortizing loan – 386
fund general partner – 267
fund limited partner – 267
Funds Available for Distribution (FAD) – 200
Funds from Operations (FFO) – 134, 200
future value – 364, 365, 366, 367, 369, 370

G

Germany – 248
going dark – 50, 101
going-in cap rate – 95, 173
going-out cap rate – 173
Goldman Sachs – 268
Gordon Model – 123, 125, 126, 136, 251, 375
greenfield – 17
gross absorption – 347
gross development profit margin – 174
gross potential rental revenue – 56, 57
gross sales price – 95
gross sales proceeds – 258
gross square footage (GSF) – 30
ground lease – 249
guarantees – 100, 173, 231, 237, 331

H

hard cost – 168
heavy manufacturing – 22
highrise – 24
hotels – 28, 133, 412
hurdle rate – 269
HVAC – 24, 47, 48, 100, 192, 321, 322
hybrid amortization schedule – 392
hybrid REIT – 298

I

impairments – 197
income multiple analysis – 120
income tax liability – 70
income tax shield (tax shield) – 70, 71, 72, 76, 79, 211, 222, 266, 306, 323, 326, 389
infill – 17
inline store – 18
installment sale – 102
insurance – 47, 62, 64, 232
interest accrual – 168
interest coverage ratio – 228
interest-only loan – 384
interim income – 167
internal rate of return (IRR) – 378
Intex – 418
investment banks – 177, 240, 268, 303, 305
investment commitment – 267
investment vehicles – 279
IPO (initial public offering) – 265, 299, 305
issuer – 412, 416, 417, 418, 420

J

Japan – 27, 123, 220, 321
junior creditor – 207
junior debt – 222
JW O’Connor – 269

K

key performance indicators (KPIs) – 84
Kmart – 18, 414

L

labor unions – 102
land cost – 168, 185
land purchase option – 169
landlord concessions – 88
Latin America – 38, 39
LBO funds – 269
leases – 45, 230
leasing commissions (LCs) – 68
Lehman Brothers – 412
lessee – 45
lessor – 45
leverage – 211
levered cash flow – 74
levered IRR – 381
LIBOR – 244, 412, 417
lien – 99
light assembly – 22
like-kind exchange – 307
limited service hotel – 28
liquidity – 3
loan acceleration – 229
loan constant – 232
loan covenants – 229
loan default – 206
loan delinquency – 206
loan draws – 231
loan modification – 206
loan points – 74, 75, 233
loan pool – 240, 243, 412, 414, 417
loan principal – 384
loan restructuring – 206
loan term – 226
loan terms – 231
Loan-to-Cost (LTC) – 227
Loan-to-Value (LTV) – 74, 223, 227, 228, 239, 244, 254, 260, 262, 267, 299, 381, 391, 412, 418
local partners – 42
lock-out clause – 229
Lonestar – 269
look-back – 273
loss carry-forward – 77
loss factor – 30, 178, 192, 322
Lubert-Adler – 269

M

margin call – 357
market research – 7
mezzanine finance – 222, 223, 417
midrise – 25
midrise apartments – 27
millage rate – 62
minority interest – 198, 262
Morgan Stanley – 177, 268
mortgage constant – 386
mortgage REIT – 298
multifamily – 26
multiple on equity – 84
multiple on invested capital – 84

N

NAREIT – 397, 398, 400, 401, 402, 403
natural disaster – 3
NCREIF – 397, 398, 400, 401, 402, 403
negative amortization loan – 168, 393
negative covenants – 229
negative leverage – 218, 219
net absorption – 347
Net Asset Value (NAV) – 202, 203, 204, 205
net effective rent – 49
net leasable square footage (LSF) – 30
net lease – 49
net operating income (NOI) – 66
net present value (NPV) – 174, 377
net rent – 49, 220, 361
net sales price – 95
net sales proceeds – 95
new value exception – 209
NOI after normal reserves – 68
non-climate controlled – 29
noncombined affiliates – 197
non-compete clause – 53
non-recourse – 210, 212, 222, 231, 298, 323
non-reimbursable expenses – 63
normalized reserves – 122

O

Oaktree – 269
occupancy – 33
office – 24
open plan – 347
operating expenses – 2, 62, 102
opportunity funds – 266
origination costs – 75
origination fees – 233
outparcel – 18
overage – 46, 58

P

pari passu – 269
parking – 53
participating debt – 222
pass-through entity – 75
pass-throughs – 59
pay rate – 417
pay requisition – 232
pension funds – 222, 239, 240, 243, 267, 269, 298
percentage rents – 46, 53, 58
perpetuity – 123
physical occupancy – 33
positive amortization – 386
positive covenants – 229, 230
positive leverage – 218, 220
possible maximum loss (PML) – 100
power center – 20
preferred equity – 222
preferred return (pref) – 269
pre-lease – 171
prepayment penalty – 229
pre-sale – 171
present value – 364, 367
private equity funds – 199, 222, 266, 267, 400, 401, 402, 403
pro forma – 10, 13, 52, 55, 60, 70, 83, 98, 102, 103, 111, 154, 155, 165, 168, 174, 193, 194, 196, 218, 219, 221, 240, 254, 324, 347, 350, 361, 393, 450
promote – 269, 270, 280, 281, 282, 283, 285, 286, 289, 291
property design – 192
property line – 17
property management – 64
property tax reassessment – 102
property taxes – 47, 62
property title search – 99
property-level IRR – 379
purchase cap rate – 95
put option – 231

Q

qualified intermediary (QI) – 264

R

radius restriction – 53
rate cap – 226
rating agencies – 243, 244
real estate cycles – 344, 347
real estate owned (REO) – 207, 416
Realpoint – 418
receivables – 231
recourse – 54, 231
recoverable expenses – 59
refinancing – 234, 260
regional mall – 20
reimbursable expenses – 62
REIT – 256, 298, 302, 303, 304, 306, 307, 308, 398, 399, 400, 401, 402
release price – 171
rent – 46
rent abatement – 48
rentable square footage (RSF) – 30
rental growth – 4
replacement cost – 122, 123
replacement rent – 182
replacement reserves – 67, 91
residential mortgage-backed securities (RMBS) – 355
residual land valuation – 185
residual split – 270
residual value – 14, 43, 93, 145, 201, 214, 216, 220, 398, 410
retail – 58, 171, 322
return on cost – 173
reversion – 372
rezoning – 169
risk premium – 126, 136, 160, 161, 169, 319, 374
risk-adjusted – 364
Rockefeller Center – 209, 258
run rate – 191
Russian ruble crisis – 132

S

S&P – 243, 398, 399
secured lender – 208, 209, 223, 227, 231, 237
securitization – 243
security deposit – 54
security interest – 99
selling costs – 95
sensitivity analysis – 57
September 11th – 102, 219, 232
setback restriction – 31
short sale – 206
signage – 50
single taxation – 298
soft costs – 168, 190
special servicer – 243, 412, 416
special-purpose-bankruptcy remote entity (SPE) – 240
speculative (spec) – 165, 352
speculative homebuyers – 355
sponsor – 267
stabilized NOI – 121, 122, 123, 135, 137, 138, 139, 158, 173, 372, 375
stabilized property – 57, 121
stacking plan – 33
stand-alone center – 18
Starwood – 269
strip retail center (strip center) – 18
subleasing – 25
sublet rights – 51
subprime – 354
suburban garden apartments – 26, 27
suburban office buildings – 25
superflat floors – 22
Superfund Law – 100
sweep – 233
syndicate – 266
synthetic lease – 331

T

target return – 183
tax liability – 75
tax lot – 17
taxable income – 71, 75
tenant improvements (TIs) – 48, 67
tenant mix – 53
tenant reimbursements – 45, 59
tenant turnover – 57
terminal value – 2, 3, 201, 251, 252, 372, 374, 375
TI allowance – 48, 67
time value of money – 49, 260, 364, 371
title – 17
title survey – 99
total annual return – 219
trade area analysis – 103
tranche – 243, 416
tranching – 243
trending rents – 183
Trepp – 418
triple net (NNN) lease – 49

U

unanchored – 18
underwriting – 227
unencumbered – 99
unlevered cash flow – 68, 75, 76, 371
unlevered IRR – 379
unsecured debt – 209
unsecured deficiency claim – 210
UPREIT – 141, 301, 307
utilities – 2, 47, 64, 90

V

vacancy – 2, 33, 57, 89
value engineering – 189
variable operating expenses – 45, 90
variable rate loan – 226

W

Walmart – 18
Walton Street – 269
warehouse – 22, 23, 322
wealth position – 259
weighted average cost of capital (WACC) – 223
Westbrook – 269
Western Europe – 39, 40
work letter – 232
WorldCom – 130

Y

yield maintenance – 236
yield on cost – 173, 181

Z

Zell-Merrill fund – 267
zero-amortization loan – 384