Glossary of commercial 
real estate terms

A valuation method that estimates the value of a property by comparing it to similar properties that have recently sold.

A loan with an established payment history, typically several months or years, demonstrating reduced risk to lenders or investors.

• Unlike project-based Section 8, Section 8 vouchers are provided to eligible individuals or families and allow tenants to choose their own housing within program guidelines.
• Voucher holders are responsible for finding their own housing in the private rental market.
• Voucher holders can choose any eligible rental unit that meets program requirements, including private landlords and apartment complexes.
• The rental assistance is applied towards the tenant’s portion of the rent, and the voucher holder pays the difference.
• Vouchers offer more flexibility as tenants can move to different rental units within the program guidelines.
• In many Housing Authority jurisdictions, the full payment standard for the voucher is payable above any other limiting programmatic restrictions.

The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities. It is used as a benchmark for floating rate loans.

A commercial real estate class that caters to individuals and businesses seeking secure storage solutions. Self-storage facilities are designed to house a number of individual storage units, each carrying a separate lease.

A financing arrangement where the property seller acts as the lender for the buyer.

Any of the subsets of housing specifically for seniors (age 55 and up).

An investment vehicle that typically has a single investor. Unlike a joint venture, WDIP does not invest its own capital in an SMA.

The sending of payment notices to borrowers after the loan is closed, collection of payments from a borrower, maintenance of records of payments and balances, investor reporting, delinquency administration, and handling notification to any investor to whom the loan has been sold (e.g., CMBS), and other miscellaneous services as required.

Purpose-built housing designed to be operated as single-family rental investments.

A facility that provides healthcare and rehabilitation services that can only be performed by a registered nurse or doctor on a continuous or daily basis.

A Fannie Mae program that provides a pricing incentive for borrowers wanting to establish rent restrictions as part of a private financing approach to address the affordability crisis for missing-middle renters.

Fannie Mae’s product that requires a minimum of 20% of units that are affordable at 80% of AMI or less, as adjusted for family size.

See General Partner above.

The sponsor sets restrictions on a percentage of the units at a particular AMI level. Rent does not exceed 30% of adjusted AMI for unit size.

The amount over an applicable index that a lender charges to make a loan, e.g., on a 10- year fixed rate loan, there might be a spread of 200 bps over the 10-year treasury.

A commercial real estate property that has reached consistent occupancy and income levels, typically at or near market averages, indicating reduced leasing risk and predictable cash flow.

The capitalization rate of a commercial real estate property once it has achieved stabilized operations, with consistent occupancy and income levels reflective of market norms. It is used to evaluate the property's long-term return potential.

Long-term financing with a very competitive variable interest rate that is convertible to a fixed-rate for the acquisition or refinance of multifamily properties. A SARM Loan is an ARM Loan with an external Interest Rate Cap.

A combination of senior debt, secured by a mortgage or the property itself, and preferred equity or mezzanine debt, typically employed as a “bridge” for short-term needs, used to finance a commercial real estate transaction. But not every bridge loan is considered structured debt.

A combination of preferred equity and common equity, the investment made by owner/ operators and their partners, used to finance a commercial real estate transaction.

Structured finance is used after the first mortgage when borrowers need options beyond debt financing and includes all options in the capital stack, including joint venture equity, bridge and preferred equity, mezzanine financing, platform or operating company investments, and development/construction financing. If a borrower can get 60% LTV for the first mortgage, then the borrower goes up the capital stack for structured finance or more equity. Typically, the borrower tries to get structured finance from 60-75% – e.g., preferred equity or mezzanine equity. Our structured finance group plays above the first mortgage and common equity and can go into common equity, e.g., joint venture.

A residential building designed and/or predominantly inhabited by students enrolled in a college or university.

Four major athletic conferences in U.S. college sports: the Big Ten Conference, the Big 12 Conference, Southeastern Conference (SEC), and Atlantic Coast Conference (ACC). These conferences are identified as having the greatest influence, resources, and national prominence. Because Power 4 schools tend to have large enrollments, strong brand appeal and strong growth, they drive increased demand for student housing — especially purpose-built student housing (PBSH).

A sub-category of operational real estate that includes film and TV studios and soundstage facilities.