Glossary of Terms

S

SALES BROKER
Commercial real estate broker that represents client in the sale or purchase of commercial real estate property.

SECOND MORTGAGE
A mortgage that is second in priority because of the time of recording the mortgage or of the subordination of the mortgage.

SECONDARY MORTGAGE MARKET
The buying and selling of first mortgages or trust deeds by banks, insurance companies, government agencies, and other mortgagees. This enables lenders to keep an adequate supply of money for new loans. The mortgages may be sold at full value ("par") or above, but are usually sold at a discount. Not to be confused with a "second mortgage."

SELF�STORAGE
(also called Mini�Storage) Provides personal storage for lease by consumers.

SELF�AMORTIZING MORTGAGE
One that will retire itself through regular principal and interest payments. Contrast with balloon mortgage or interest�only loan.

SENIOR HOUSING
(includes Assisted-Listing, Congregate-Care, Senior Apartments and Skilled Nursing Centers) Multi�residential property specifically designed for care of senior citizens and/or physically-disabled persons.

SHADOW ANCHORED
An unanchored shopping center located near an anchored shopping center.

SINGLE WIDE
A mobile home consisting of one unit.

SITE WORK
The location or place of a plot of ground set aside for a particular type of land use.

SKILLED NURSING
A type of senior-housing which offers on�site medical care.

SOLE PROPRIETORSHIP
Ownership of a business with no formal entity as a vehicle or structure.

SPREAD
Number of basis points over a base rate index.

SPRINKLER
Existence of fire-suppression systems in the building.

STABILIZED OPERATING PROPERTY
The income generated on an annual basis from the commercial property is stable, consistent and reliable.

STRIP CENTER
A string of stores in a commercial area, totaling less than 30,000 square feet, without central leasing, management, or theme.

STRUCTURAL/ENGINEERING REPORT
A property Condition Report that outlines the current structural stability or instability of a property. The report will outline immediate costs needed to repair the property as well as a maintenance program to maintain the property at its current status.

SUBURBAN
Describes a town or unincorporated, developed area in a close proximity to a city. Suburbs, largely residential, are often dependent on the city for employment and support services; generally characterized by low�density development relative to the city.

T

TAX & INSURANCE IMPOUND
Monthly deposits that a lender may require to be included with principal and interest payments for the payment of taxes and insurance.

TENANT
One who is given possession of real estate for a fixed period or at will.

TENANT IMPROVEMENTS (TI)
The expense to physically improve the property to attract new tenants to new or vacated space which may include new improvements or remodeling. May be paid by tenant, landlord, or both. Typically, tenants are provided with a market rate TI allowance ($/sq. ft.) that the owner will contribute towards improvements. The tenant must pay for amounts above the TI allowance desired by the tenant.

TERM
The length of time a mortgage rate is fixed or adjustable prior to it coming due. Different from loan amortization.

THIRD PARTY COSTS
Costs resulting from third-party reports such as appraisal reports, environmental reports or structural engineering reports.

TIMBERLAND
Land used for production of forest stands for commercial use.

TITLE
The actual legal document conferring ownership of a piece of real estate.

TITLE INSURANCE
An insurance policy that insures you against errors in the title search � essentially guaranteeing your, and your lender�s, financial interest in the property.

TOTAL ANNUAL OPERATING INCOME
Total yearly income less operating expenses, adjustments, etc., but before mortgage payments, tenant improvements and leasing commissions.

TOTAL ANNUAL ROOM INCOME
A hotel definition that represents the gross annual receipts from room revenue.

TRAFFIC COUNT
The amount of incoming and outgoing traffic a retailer or self�storage building generates over a fixed period of time.

TRIPLE�NET LEASE (NNN)
A lease that requires the tenant to pay for property taxes, insurance and maintenance in addition to the rent (also referred to as "Net Net Net Lease").

U

U.S. TREASURY NOTE
Treasury Notes are intermediate-term securities issued with 2, 3, 5, and 10-year maturities. Treasury notes are coupon-bearing securities that pay interest on a semi-annual basis. Treasury notes are backed by the full faith and credit of the U.S. Government.

UNANCHORED
A tenant in a shopping center, which doesn't have an anchored tenant.

UNDERWRITING
The process of deciding whether to make a loan based on property cash flow, credit, and/or other factors.