Glossary of commercial 
real estate terms

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.

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.

A smaller, defined geographic area within a larger real estate market, characterized by shared economic, demographic, or property type trends, often used to analyze localized real estate performance.

Loans with lower repayment priority than senior debt, often used to complete a capital stack.

Real estate development, investment, or management practices that prioritize environmental, social, and economic sustainability by reducing resource consumption, minimizing environmental impact, and promoting long-term resilience and efficiency.

A temporary alliance formed by professionals to handle a large transaction that would be impossible to execute individually. By forming a syndicate, members can pool their resources together, and share in both the risks and the potential for attractive returns. This individual or company is in charge of finding, acquiring, and managing the real estate. They have a history of real estate experience and the ability to underwrite and do due diligence on the real estate.

Freddie Mac’s product that requires a percentage of units to be affordable between 60- 80% of AMI or less as adjusted for family size.

The executive department of the federal government that administers federal housing and urban development laws.

From Walker & Dunlop insights to timely industry news, this monthly LinkedIn newsletter offers a mix of the latest trends and information in commercial real estate and finance. The WorD features thought leadership articles, news links, analysis reports, and a calendar of upcoming events and Walker Webcasts.

The difference between Treasury bond yields and a property loan or bond yield, reflecting relative risk.

A prestigious property, usually in a prime location with strong underlying fundamentals, which is in high demand.

High Yield Notes, Initial Public Offerings, Institutional Term Loans, Investment Grade Notes, Joint Venture Financing, Minority Investments, Primary and Secondary Equity Offerings, Private Debt & Equity Placements, Project Financing, Public & Non-Traded REITs, and Strategic Investor Sourcing.

The internal rate of return calculated without considering the impact of debt financing.

A global nonprofit organization dedicated to promoting responsible land use and sustainable community building.

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The percentage of unoccupied rentable space in a property or market, calculated by dividing the vacant space by the total available space, used to measure supply and demand dynamics in real estate.

Real estate valuation is a process of using three methods (sales comparison, cost, and income approaches) to determine the current value of a potential real estate investment. A property’s estimated value takes into consideration a variety of key data points, in addition to current market conditions and political and social trends.