Glossary of Terms

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MALL
(also called a Super-Regional Center) An enclosed shopping center with three or more major department stores which typically draws from a large trade area of 12 or more miles.

MANAGEMENT FEE
The agreed�upon compensation paid to a property-management company for managing a real estate project. The fee is usually based on a percentage of effective gross income.

MANUFACTURING
(also called Heavy Industrial) Auto-making, textiles, steel, chemicals, and food-processing are typical uses of such properties. Typically zero to five percent office space.

MARGIN
The amount that is added to an index rate to determine the total interest rate.

MARKETING EXPENSES
Expenses accrued to market commercial properties.

MAT
Monthly Average Treasury.

MATURITY
1. The termination period of a note (e.g., a 25�year mortgage has a maturity of 25 years). 2. In sales law, the date a note becomes due.

MAX CONTIGUOUS SF
The amount of available connected square feet.

MAX LEASE RATE
The highest asking lease rate.

MEDICAL OFFICE
An office space which offers medical services.

MEZZANINE/SECOND LOAN
A loan secured by a mortgage or trust deed in which the lien is junior, or secondary, to another mortgage or trust deed.

MID�RISE
A commonly-used expression referring to an office building that is high enough to require stairs but too low to require an elevator.

MILITARY CLAUSE
A clause included in a lease of a property (most commonly found in residential leases), which allows the tenant to terminate the lease without penalty if and when the tenant is transferred to another location.

MIN LEASE RATE
The lowest lease rate available.

MIN. DIVISIBLE SF
The smallest amount of available square feet.

MIXED USE
A real estate development that contains two or more different uses all intended to be harmonious and complementary. An example would include a high�rise building with retail shops on the first two floors, office space on floors three through ten, apartments on the next ten floors, and a restaurant on the top floor.

MOBILE HOME PARK
A parcel of land zoned and developed for use by occupants of mobile homes.

MONEY MARKET
The market for short�term debt instruments.

MULTI�FAMILY PROPERTY CLASS A
Properties are above-average in terms of design, construction and finish; command the highest rental rates; have a superior location, in terms of desirability and/or accessibility; generally are professionally-managed by national or large regional management companies.

MULTI�FAMILY PROPERTY CLASS B
Properties frequently do not possess design and finish reflective of current standards and preferences; construction is adequate; command average rental rates; generally are well-maintained by national or regional management companies; unit sizes are usually larger than current standards.

MULTI�FAMILY PROPERTY CLASS C
Properties provide functional housing; exhibit some level of deferred maintenance; command below-average rental rates; usually located in less desirable areas; generally managed by smaller, local property-management companies; tenants provide a less-stable income stream to property owners than Class A and B tenants.

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NEIGHBORHOOD CENTER
(including Community Center) A shopping center anchored by a supermarket and/or drugstore, that provides convenience-goods and services to a neighborhood. It is usually between 30,000 � 100,000 square feet, and draws from a one to three mile radius.

NET EFFECTIVE RENT
Rental rate adjusted for lease concessions.

NET OPERATING INCOME (NOI)
Total income less operating expenses, adjustments, etc. but before mortgage payments, tenant improvements and leasing commissions.

NET�NET LEASE (NN)
Usually requires the tenant to pay for property taxes and insurance in addition to the rent.

NON�RECOURSE
A mortgage or deed of trust securing a note without recourse allowing the lender to look only to the security (property) for repayment in the event of default, and not personally to the borrower. A loan not allowing for a deficiency judgment. The lender�s only recourse in the event of default is the security (property), and the borrower is not personally liable.

NOTICE OF DEFAULT (NOD)
To initiate a non�judicial foreclosure proceeding involving a public sale of the real property securing the deed of trust. The trustee under the deed of trust records a Notice of Default and Election to Sell ("NOD") the real property collateral in the public records.

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OFFICE
A structure used primarily for the execution of business transactions.

100% PRIVATE PAY
An assisted-living designation where senior-housing residents pay 100% of the rent versus paying by welfare or government subsidies.

OPERATING EXPENSE
Periodic expenses necessary to the operation and maintenance of an enterprise (e.g., taxes, salaries, insurance, maintenance). Often used as a basis for rent increases.

ORIGINATION
Securing a completed mortgage application from a commercial (or residential) borrower.