In real estate, a subordination clause ranks one claim on a property behind or “subordinate” to another. This usually occurs in a loan agreement when a borrower takes out a mezzanine or supplemental loan on top of their original first-position mortgage.
Pad Sites in Commercial Real Estate
PGI: Potential Gross Income in Real Estate
What is a Mini-Perm Loan?
Full Service Leases in Commercial Real Estate
A full service lease, sometimes known as a full service gross lease, or FSG lease, is a type of commercial real estate lease in which the landlord is responsible for paying all operating expenses for the property. This typically includes insurance, utilities, necessary property repairs and maintenance, taxes, and other, unexpected expenses, but can vary greatly from lease to lease.
MG: Modified Gross Lease in Commercial Real Estate
A modified gross lease, or MG lease, is a type of commercial real estate lease where the property owner and the tenant share in the operational costs of the property, including utilities, insurance, taxes, and maintenance. An MG lease can be considered to be a hybrid between a NNN (triple net) lease and an FSG (full-service gross) lease.
What is Building Efficiency Ratio in Real Estate?
FAR: Floor Area Ratio Definition and Explanation
Floor area ratio (FAR) is a zoning metric that uses a building’s floor area and lot size to calculate the maximum square footage of a building that can be developed on a specific parcel of land.
LTV: Loan To Value in Commercial Real Estate
LTV, or loan-to-value ratio, is one of the most important metrics in commercial real estate. It is used to compare the amount of a loan to the current estimated market value of a commercial or multifamily property.
What is an Assumable Loan in Commercial Real Estate?
An assumable loan is a loan that can be assumed, or taken on, by a new borrower before the end of the loan’s term. Many types of loans are assumable, including most Fannie Mae, Freddie Mac, HUD multifamily, and CMBS loans.
What is Defeasance in Commercial Real Estate?
What Are "Bad Boy" Carve-Outs?
Merchant Builders in Commercial Real Estate: Definition & Explanation
Floor Plate in Commercial Real Estate: Definition & Explanation
What is Debt Yield?
Debt yield is a commercial real estate metric used by lenders to determine how long it would take them to get back their investment if the borrower defaulted on their loan and they had to foreclose on the property. Debt yield is calculated by dividing a property’s net operating income (NOI) by the total loan amount.
What is a Debt Service Coverage Ratio (DSCR)?
What are TI/LC: Tenant Improvements / Leasing Commissions?
What is GLA: Gross Leasable Area in Real Estate?
What are A, B, and C Class Buildings in Real Estate?
Commercial and multifamily real estate is generally identified by building quality or class. Class A, B, and C are the main categories, with “A” being best, and "C” being worst, though some properties may be referred to as “Class D.” Building classes are typically relative to the quality of properties offered on the local real estate market.