The revenue you would receive if a building’s leasable space was 100% occupied, and all square footage was leased at market rent.

GPR net of vacancy.

A property at full occupancy, except for an expected “systemic” level of vacancy, whose NOI is flat or growing relatively smoothly year-over-year. For instance, a 100-unit apartment building with 4% yearly vacancy and 2.5% yearly NOI growth.

Churn in property occupancy when a tenant lease expires and they vacate.

Income generated from all other activities conducted at the property other than rental of suite square footage.

Financial analyses that change one or more assumptions to explore the impact of these changes on calculated outputs.

The first year’s rent for a leased space.

A form of additional rent that specifies the percentage of the tenant’s gross sales revenue that the landlord receives in addition to the base rent and escalations; helps to align retail tenant interests with those of the landlord.

A predetermined revenue threshold over which a percentage of incremental sales are paid to the retail landlord.

Net base rental revenue plus any percentage rent.

Payments defined in the leases, made by tenants to the landlord for specified property expenses such as insurance, property taxes, security, and utilities.

The costs associated with the operating and maintenance of areas and services that benefit all tenants such as the lobby, hallways, parking areas, security and snow removal.

The portion of CAM costs that are billed to tenants.

The portion of property tax costs that are billed to tenants.

The anticipated non-payment of rent and other revenues; usually 1-2% of the Expected Gross Income; rises in a weak economic environment or as your tenant quality profile deteriorates.

Gross Income less Credit Loss.

The costs required to effectively operate and maintain the property.

Operating expenses initially borne by the landlord that are paid for at least in part by one or more tenants.

The amount per $1,000 used to calculate real estate taxes.  The millage rate is multiplied by the property’s assessed tax value to generate the tax liability.

The dollar value assigned to a property to calculate applicable real estate taxes.

Operating costs without the negotiated right to reimbursement from tenants.

The fee paid to the property manager for fulfilling the associated scope of work (collecting rent and overseeing daily operations, including maintenance and repair and janitorial programs).

The sum of all reimbursable and non-reimbursable operating expenses.

Total Operating Income less Total Operating Expenses; summarizes the property’s ability to generate income, irrespective of capital structure.

The collection of property-related expenditures critical to attracting and retaining target tenants, and to maintaining both a high property operating standard and the integrity of the physical plant. Examples include roof repair, elevator replacement, boiler replacement, and parking structure repair.

Funds set aside that provide for the periodic major repair or replacement of building components that wear out more rapidly than the building itself. Senior lenders require minimum capital reserves be set aside and maintained to ensure continued property competitiveness.

Interior space physical improvements made to make tenant space habitable, useful, and pleasant.

Tenant improvement scope of work budget provided by the landlord.

The fees the landlord pays to a broker or leasing company that leases their space.

Dollars spent by the landlord for the repair or replacement of major property elements not located in tenant premises, such as the boiler in the basement, the air conditioning chiller on the roof, elevators, and the parking structure. Capital expenditures reflect the property’s actual wear and tear, for which you must spend money to keep the property in competitive condition.

NOI after the deduction of capital and leasing costs; “unlevered” refers to the lack of impact of any debt financing in the calculation of the cash flow, and as such, like NOI, unlevered cash flow also reports property performance irrespective of capital structure.

Unlevered cash flow in a forward-looking financial modeling context, where the adjustment to NOI references the deduction of normal reserves.

An IRS-based allocation mechanism providing the multi-period schedules on which you are allowed to deduct the cost of capital expenditures for income tax calculation purposes.

An accounting method that reduces taxable income based on IRS rules, such as depreciation of capital expenditures.

What the property owner will owe in annual income tax.

Unlevered cash flow minus total debt service (interest payments and any amortization).

The income amount to which the tax rate is applied. Calculated as before-tax levered cash flow less depreciation, plus TIs and cap ex and loan principal amortization, less loan points amortization.

The amount of the property purchase price that can be depreciated. Land is not depreciable in the U.S.

The rate at which an item is depreciated (e.g., 1/39th per year for the structure of an office building, which has a 39-year depreciable life).

The amount of time over which an asset can be depreciated: 27.5 years for residential properties and 39 years for all other property types. Land is not depreciable in the U.S.

An analysis of all of the unique depreciable elements of a property that tracks the individual depreciation amounts based on the appropriate schedules.

Unlevered returns on an investment (i.e., if the property were acquired only with cash).

The expected before-tax and after-tax cash flows exclusively to equity.

The fee paid to the lender to compensate for the lender’s underwriting costs.

The combination of both interest and principal payments made.

A legal entity structure, such as a Limited Liability Company (LLC) or Limited Legal Partnership (LLP), that allows for the tax liability of a property to be passed through to the individual members of the entity.

The ability for a property owner can use a prior year cumulative Taxable Losses to offset subsequent year tax liabilities.

Accumulated income tax losses that can be applied against taxable income for the current or a future tax year.