Commercial Real Estate

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LTV: Loan To Value in Commercial Real Estate

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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.

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What is an Assumable Loan in Commercial Real Estate?

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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.

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What is Defeasance in Commercial Real Estate?

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What is Defeasance in Commercial Real Estate?

Defeasance is a type of prepayment penalty which involves a commercial real estate borrower purchasing income-producing bonds to replace the income the lender loses from the borrower prepaying the loan.

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What Are "Bad Boy" Carve-Outs?

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What Are "Bad Boy" Carve-Outs?

Non-recourse loans prevent a lender from going after a borrower’s personal property in the case of a default. Bad boy carve-outs allow the lender to go after the borrower’s personal property if they conduct themselves badly.

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Merchant Builders in Commercial Real Estate: Definition & Explanation

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Merchant Builders in Commercial Real Estate: Definition & Explanation

Merchant builders are commercial real estate developers who build properties and sell them in a short time frame. Merchant builders develop properties in all asset classes, including multifamily and single-family homes.

Floor Plate in Commercial Real Estate: Definition & Explanation

Floor Plate in Commercial Real Estate: Definition & Explanation

Floor plate is a term that indicates the amount of square footage that can be leased on each floor of a commercial building. Due to structural considerations, in high-rise buildings, floor plates on lower stories are typically larger than floor plates on higher stories.

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What is Debt Yield?

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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.

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What is a Debt Service Coverage Ratio (DSCR)? 

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What is a Debt Service Coverage Ratio (DSCR)? 

A TI, or tenant improvement, is an improvement made by the property owner so that the property better fits the need of the new tenant. An LC, or leasing commission, is the real estate agent’s or broker’s commission received after a lease is successfully closed.

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What are TI/LC: Tenant Improvements / Leasing Commissions? 

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What are TI/LC: Tenant Improvements / Leasing Commissions? 

A TI, or tenant improvement, is an improvement made by the property owner so that the property better fits the need of the new tenant. An LC, or leasing commission, is the real estate agent’s or broker’s commission received after a lease is successfully closed.

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What is GLA: Gross Leasable Area in Real Estate?

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What is GLA: Gross Leasable Area in Real Estate?

GLA, or gross leasable area, or GLA, is the part of a commercial or multifamily building that is designated for use by the tenant alone.

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