Glossary of commercial 
real estate terms

A tax-deferral mechanism allowing real estate investors to sell a property and reinvest the proceeds into similar properties to defer capital gains taxes if IRS rules are followed.

The rate at which residential units are leased over a specific period, typically expressed as units leased per month or as a percentage of total available units. It’s a critical indicator of renter demand and market health, used by institutional investors, developers, and analysts to assess lease-up velocity and forecast rental performance.

Compares the number of units leased (absorbed) to the number of new units delivered within a specific time period. A ratio above 1.0 indicates that demand is outpacing new supply, signaling a tightening market. A ratio below 1.0 suggests potential oversupply and rising vacancy risk. This metric is essential for assessing market balance and forecasting rent growth.

An accredited investor is an individual, trust, or a business entity that is deemed a sophisticated investor based on certain financial and professional criteria.

A property converted to a different use to meet current demand. Examples could include an office building converted to residential space or an industrial space converted to a retail space.

A loan with an interest rate that adjusts with the market over time. With an ARM loan, the initial interest rate is fixed for a period of time (floating over an index like SOFR). After that, the interest rate applied to the outstanding balance is reset periodically, at yearly or even monthly intervals. If the interest rate increases, your payments increase, and vice versa.

A measure of the relationship between a household’s income and the cost of purchasing a manufactured home, typically factoring in monthly loan payments, insurance, and site rent (if applicable). A higher index indicates greater affordability. This metric is widely used to track accessibility for lower- and middle-income households and to assess the financial viability of manufactured housing as a solution to the broader housing affordability crisis.

Defined by HUD as housing where the occupant pays 30% or less of their gross income on housing and utilities.

An organization that supports the investment in affordable housing by providing resources, guidance, and collaboration opportunities for investors, with the goal of addressing the affordable housing crisis and promoting community development.

Preserving affordable properties that are at or nearing the end of their 15 year compliance period, preventing them from being redeveloped into market-rate properties. W&D Affordable Preservation does this by acquiring these assets and either extending existing income and/or rent restrictions or putting new restrictions in place.

A lender licensed or authorized to originate and/or service loans for Fannie Mae, Freddie Mac, and FHA. Walker & Dunlop is an agency lender.

Continuous repayment schedule of loan principal over a period of time until the loan is repaid.

An unbiased professional opinion of the value of a property conducted by a licensed appraiser, based on factors such as geographic location, economic fluctuations, demographics, market demand, and maintenance.

The Appraisal Institute is a global professional association of real estate appraisers, with over 16,000 professionals in almost 50 countries throughout the world. Its mission is to empower valuation professionals through community, credentialing, education, body of knowledge, and ethical standards.

A written document prepared by an appraiser that details the appraisal process, methodology, and the final value estimate.

The increase in a property’s market value over time, often influenced by demand, location, home improvements, and market conditions. For SFR investors, appreciation represents a key component of total return, alongside rental income. Tracking appreciation helps assess long-term investment performance and potential exit value.

W&D’s independent third-party valuation and advisory team that provides up-front deal sizing support, market intelligence, appraisals, financial reporting, and custom data-driven technology solutions for internal and external clients.

The total market value of investments that an advisor, investment management firm, real estate developer, fund, or other entity that manages invested capital handles on behalf of investor customers.

State-licensed residences and facilities for seniors and people with disabilities who need assistance with daily tasks and access to medical care. These facilities typically offer care that’s less extensive than that of a nursing home. These often include memory-care facilities.

A data-driven algorithm that estimates real-time property value using sales comparables, market trends, and property characteristics.

The company’s valuation and financial position at a particular time, including assets, liabilities, and equity.

A large, lump-sum payment due at the end of a loan term, typically used in commercial real estate loans with short-term durations and lower regular payments. It covers the remaining principal balance not paid during the loan term.

1/100th of 1%, used in reference to interest rates. e.g., 100 bps = 1% and 50 bps = 1⁄2 %.

This housing is specifically for renters earning below 60 percent of AMI (Area Median Income) and qualify for subsidy programs such as LIHTC and Housing Choice vouchers. All Big A affordable properties have some form of Land Use Restriction Agreement (LURA) attached to them, requiring rents to be restricted to set affordable levels.

The occupancy or revenue level at which a property's income equals its operating expenses and debt service, resulting in neither profit nor loss.