Real Estate
Study this set o nline at: https://www.cram.co m/flashcards/real-estate-58 8 76 6 8
Cl ass A: T op qual i ty bui l di ngs, of ten l ocated i n the Central Busi ness D i stri ct
Cl ass A
(CBD ), new, modern, best ameni ti es
Cl ass B: Less desi rabl e l ocati on than Cl ass A bui l di ngs, typi cal l y ol der, smal l er,
Cl ass B
and provi de l essameni ti es to tenants
Cl ass C: everythi ng el se that i s not cl assi f i ed as a Cl ass A or B, ol dest, rundown
Cl ass C bui l di ngs of ten i n needof renovati on/rehab, f ew to no ameni ti es, provi de the
cheapest rent
T ri pl e N et (N N N ): A l ease where the tenant rei mburses the Landl ord f or i ts pro
NNN rata share of expenses.T ypi cal l y i ncl udes CAM , i nsurance, and property tax. Of ten
used f or mul ti -f ami l y and retai l l eases
F ul l Servi ce Gross: A l ease where the l andl ord pays f or al l of the expenses.
F SG
T ypi cal l y used f or of f i cel eases.
M odi f i ed Gross: A l ease where the l andl ord and the tenant spl i t the expenses
M odi f i ed Gross
negoti ated i n the l ease.T ypi cal l y used f or of f i ce and i ndustri al l eases.
Cap Rate: Used to val ue and compare properti es based on N OI . A hi gh cap rate i s
i n l i ne wi th a propertywi th hi gh ri sk and has l ow rel i abi l i ty i n the cash f l ow
Cap Rate streams of the property. On the other hand, a l owcap rate i s f or properti es wi th a
hi gh purchase pri ce because buyers are wi l l i ng to accept l ower returnsi n order to
acqui re a property wi th more predi ctabl e cash f l ow streams.
Pri ce Per F oot: T hi s i s another way to di scuss a purchase pri ce or rental rate. By
Pri ce Per F oot determi ni ng the val ueof a l ease or property on a per f oot basi s, you can better
compare properti es or l eases i n an area thatmay not be of the same si z e.
, Real Estate
Study this set o nline at: https://www.cram.co m/flashcards/real-estate-58 8 76 6 8
Acre Acre: A uni t of measurement; 1 Acre = 43,560 square f eet
Coverage Rati o: T he rati o that ref ers to the amount of debt, and the borrower’s
abi l i ty to pay back therequi red payments on a l oan to a l ender. A l ow rati o
Coverage Rati o
si gni f i es an i ncreased l evel of ri sk to the l enderbecause the borrower many not
have enough N OI to repay the l oan.
F l oor Area Rati o (F AR): T he rati o of a bui l di ng’s above-grade gross f l oor area
F AR (both verti cal l y andhori z ontal l y) to the area of the l ot that the bui l di ng i s bui l t
on.
F rontage: T he space of a property that f aces the mai n street or f ront entrance of the
bui l di ng. Rentabl espace that has f rontage typi cal l y has hi gher rents associ ated
F rontage
wi th the space. I ncreased vi si bi l i ty canof ten correl ate to i ncreased f oot traf f i c or
attracti veness f or a busi ness or space.
T raf f i c Count: T he number of cars that pass by a l ocati on duri ng a gi ven ti me
T raf f i c Count peri od. An i ncreasedl evel of traf f i c can mean that the l ocati on has better
vi si bi l i ty.
Cl ear H ei ght: T hi s i s the maxi mum hei ght that a vehi cl e can be i n order to f i t
Cl ear H ei ght
through an entrance orunder a bri dge or other f orm of cl earance.
D ock H i gh: T he l oadi ng docks f ound i n retai l spaces or i n i ndustri al properti es
D ock H i gh that al l ow trucks to backup di rectl y to the property, and are the appropri ate
hei ght to unl oad/l oad i ts cargo or whatever i t i scarryi ng.
Grade Level : Where the parki ng l ot or street i s at the same l evel as the ground
Grade Level
f l oor of the property.
Study this set o nline at: https://www.cram.co m/flashcards/real-estate-58 8 76 6 8
Cl ass A: T op qual i ty bui l di ngs, of ten l ocated i n the Central Busi ness D i stri ct
Cl ass A
(CBD ), new, modern, best ameni ti es
Cl ass B: Less desi rabl e l ocati on than Cl ass A bui l di ngs, typi cal l y ol der, smal l er,
Cl ass B
and provi de l essameni ti es to tenants
Cl ass C: everythi ng el se that i s not cl assi f i ed as a Cl ass A or B, ol dest, rundown
Cl ass C bui l di ngs of ten i n needof renovati on/rehab, f ew to no ameni ti es, provi de the
cheapest rent
T ri pl e N et (N N N ): A l ease where the tenant rei mburses the Landl ord f or i ts pro
NNN rata share of expenses.T ypi cal l y i ncl udes CAM , i nsurance, and property tax. Of ten
used f or mul ti -f ami l y and retai l l eases
F ul l Servi ce Gross: A l ease where the l andl ord pays f or al l of the expenses.
F SG
T ypi cal l y used f or of f i cel eases.
M odi f i ed Gross: A l ease where the l andl ord and the tenant spl i t the expenses
M odi f i ed Gross
negoti ated i n the l ease.T ypi cal l y used f or of f i ce and i ndustri al l eases.
Cap Rate: Used to val ue and compare properti es based on N OI . A hi gh cap rate i s
i n l i ne wi th a propertywi th hi gh ri sk and has l ow rel i abi l i ty i n the cash f l ow
Cap Rate streams of the property. On the other hand, a l owcap rate i s f or properti es wi th a
hi gh purchase pri ce because buyers are wi l l i ng to accept l ower returnsi n order to
acqui re a property wi th more predi ctabl e cash f l ow streams.
Pri ce Per F oot: T hi s i s another way to di scuss a purchase pri ce or rental rate. By
Pri ce Per F oot determi ni ng the val ueof a l ease or property on a per f oot basi s, you can better
compare properti es or l eases i n an area thatmay not be of the same si z e.
, Real Estate
Study this set o nline at: https://www.cram.co m/flashcards/real-estate-58 8 76 6 8
Acre Acre: A uni t of measurement; 1 Acre = 43,560 square f eet
Coverage Rati o: T he rati o that ref ers to the amount of debt, and the borrower’s
abi l i ty to pay back therequi red payments on a l oan to a l ender. A l ow rati o
Coverage Rati o
si gni f i es an i ncreased l evel of ri sk to the l enderbecause the borrower many not
have enough N OI to repay the l oan.
F l oor Area Rati o (F AR): T he rati o of a bui l di ng’s above-grade gross f l oor area
F AR (both verti cal l y andhori z ontal l y) to the area of the l ot that the bui l di ng i s bui l t
on.
F rontage: T he space of a property that f aces the mai n street or f ront entrance of the
bui l di ng. Rentabl espace that has f rontage typi cal l y has hi gher rents associ ated
F rontage
wi th the space. I ncreased vi si bi l i ty canof ten correl ate to i ncreased f oot traf f i c or
attracti veness f or a busi ness or space.
T raf f i c Count: T he number of cars that pass by a l ocati on duri ng a gi ven ti me
T raf f i c Count peri od. An i ncreasedl evel of traf f i c can mean that the l ocati on has better
vi si bi l i ty.
Cl ear H ei ght: T hi s i s the maxi mum hei ght that a vehi cl e can be i n order to f i t
Cl ear H ei ght
through an entrance orunder a bri dge or other f orm of cl earance.
D ock H i gh: T he l oadi ng docks f ound i n retai l spaces or i n i ndustri al properti es
D ock H i gh that al l ow trucks to backup di rectl y to the property, and are the appropri ate
hei ght to unl oad/l oad i ts cargo or whatever i t i scarryi ng.
Grade Level : Where the parki ng l ot or street i s at the same l evel as the ground
Grade Level
f l oor of the property.
