Glossary of commercial 
real estate terms

A snapshot of a property’s current income, as reflected in signed and valid leases.

An initiative of the U.S. Department of Housing and Urban Development (HUD) that seeks to preserve and improve certain kinds of affordable housing subsidized by HUD. RAD can be financed with HUD, GSE, or other lenders.

A valuation method estimating the cost to replace a property with a similar one of equal utility.

The remaining value of land after subtracting development and construction costs from the total project value.

Commercially zoned property used solely for the purpose of selling products. Examples include retail stores, malls, and shopping centers.

A process where sellers prepare for buyer inquiries by proactively identifying and addressing property issues.

The additional return investors require for taking on higher-risk investments.

The return on an investment after accounting for the risks involved, used to compare investment options.

Data tracking changes in property and violent crime rates in a neighborhood over time to inform decisions.

A transaction where a property owner sells their real estate to an investor and simultaneously leases it back, allowing the seller to free up capital while retaining operational control of the property.

Recent transaction data on similar properties used to estimate a property’s value and assess potential.

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.

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.

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.

See General Partner above.