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Anchored tenants: enormous brand-name national tenants, e.g. Albertsons, Longs Drug, Walmart that bring in lots of traffic to the shopping center.

CAM: favorite state Maintenance. Associated with CAM is CAM fees. For NNN leases, the term CAM fees refer to the money tenants pay landlord to screen property taxes, insurance and maintenance.

Cap rate: Return of investment in the first year of ownership. Capitalization rate is the ratio of 1st year rep Operating Income over the hold mark. The higher the cap rate, the higher the rental income. For people who invest in the stock market, cap rate is the inverse of P/E ratio.

Cash on cash: annual percentage return of your down payment not including appreciation. First year cash sprint divided by your initial down payment.

Conduit loan: also called Commercial Mortgage Backed Securities (CMBS) loan often with the lower rate than ancient commercial loan but either has high pre-payment penalty (called defeasance or Yield Maintenance Penalty) or does not have payoff flexibility.

CPD: Car Per Day or traffic volume on a road.

CPI: Consumer notice Index. It’s often frail to calculate annual rental increase to compensate for inflation.

Due Diligence Period: the duration after acceptance normally 15-30 days to allow buyer to investigate about the property. Buyer can murder the contract during this time for any reasons and accumulate chubby refund of the deposit.

Estoppel Certificate: a letter provided and signed by tenant confirming the unusual rent and terms.

Full-service lease: lease in which tenant pays rent that covers everything including utilities.

tainted income: total annual income before any expenses.

wrong lease: lease in which tenants objective pay rent. Landlord pays tax, insurance, & maintenance.

GLA: rotten Leaseable location or total rentable set. This is the site that can be leased and receive rental income. It does not include spaces for utilities room, elevator, etc.

GRM: harmful Rent Multiplier for apartment. Ratio of pick mark over annual income.

LLC: diminutive Liabilities Company. A true entity many investors formed to absorb commercial properties.

LOI: Letter of Intent/Interest or the normally non-binding offer letter veteran to gain an offer to steal a commercial property.

MAI appraiser: Member Appraisal Institute commercial appraiser.

Master lease: lease signed by the seller to rent the vacant status to provide rent guarantee.

Mixed Use: commercial properties with retail on 1st floor and apartment on upper floors.

Triple accumulate (NNN) lease: lease in which tenants pay ghastly rent plus property tax, insurance & CAM fees. Absolute NNN lease is NNN lease that tenants also pay property management fee.

NOI: get Operating Income. Annual income after all expenses (property taxes, ins., & maintenance) except mortgage payment.

Pad: stand alone building in a prime spot of a mountainous shopping center.

Pass Thru: peruse reimbursement.

Percentage lease: lease in which tenant pays inappropriate rent plus a percentage of tenant’s revenue.

Phase I Report: inspection describe that provides an assessment for soil/environment contamination. It’s normally required by the lender as portion of loan approval process for a commercial property.

Phase II Report: inspection record for soil & groundwater subsurface investigation. This inspection is more extensive which involves testing to discover if there is any soil and water contamination.

Proforma income: potential, i.e. higher, income when the property is 100% leased.

Proforma Cap rate: potential cap rate assuming property is 100% leased at market rent.

Reimbursement: the piece of property tax, insurance & CAM fees that a tenant has to pay the landlord besides the execrable rent.

Rent guarantee: rent paid by the seller to buyer for vacant spaces until they are leased.

SBA Loan: a government-guaranteed loan for owner-occupied properties.

SNDA: Subordination, Non-disturbance, and Attornment. it’s an agreement required by lender, signed by the tenants agreeing: the original lien in 1st position; lender as landlord in case of foreclosure; lease as wonderful as long as tenant is not in default.

TIC: Tenants In favorite. A contrivance for small/self-directed IRA investors to beget a section of high-valued properties as tenants in favorite.
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