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| A real estate professional who locates real estate assets and negotiates terms for their purchase to place them into an investment portfolio |
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| A real estate professional specializing in providing an informed and defensible opinion of real estate asset value |
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| A real estate professional who maintains and creates value by maximizing the attractiveness of properties and by keeping them leased up. Duties may also include portfolioi composition, property acquisition and disposition and asset performance monitoring. |
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| A real estate professional who facilitates the sale of real estate assets by bringing together buyers and sellers. |
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| Critical mass of market participates |
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| For any given market, the number of able buyers and willing sellers necessary to ensure that no single market participant or coordinated collection of participants will possess sufficient power to influence information flows and thereby impact prices. |
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| A financial institution that specializes in meeting the banking and financial needs of businesses. A commercial bank concentrates on short-term assets and obligations. Such banks are significant real estate construction lenders. |
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| A real estate professional, usually working as an independent contractor, who for a fee provides specific advice. |
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| Corporate real estate executive |
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| A company officer, usually of an organization whose main business is not real estate, who is involved in real estate decision-making within the organization. |
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| A term coined to capture how real estate markets are generally characterized by little information, especially little relevant transaction information. |
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| An asset whose value is drived from the value of underlying assets that back it. |
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| An entrepreneur whose expertise is used to gather necessary factors of production to create real estate for human needs. |
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| A term to describe how quickly transaction prices within a market reflect relevant market information. |
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| Every parcel of real estate is unique, a characteristic of real estate that contributes to market inefficiency. |
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| A lender in the real estate market that specializes in making permanent commercial loans (mortgages). |
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| A real estate professional, often working for government, who is engaged in the process of planning for the appropriate use of land. A planner is typcially involved in land use regulation and policy. |
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| A real estate broker who specializes in facilitating property leases rather than property sales for principals. |
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| The generic term for someone who lends capital for real estate in exchange for contractual debt service and a collateral interest in the property. |
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| A term for a real estate market that tends to be geographically unique, which contributes to its inefficiency. |
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| A real estate professional who investigates, reports on, and sometimes forecasts the conditions of real estate markets. |
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| A generic term for a real estate asset created by real estate lenders; it actually consists of two coupled assets: a note creating a loan and a collateral agreement securing the loan. |
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| A lender who specializes in using borrowed funds, usually from commercial banks, to orginate real estate mortgages. |
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| An intermediary who specializes in bringing real estate borrowers together with real estate lenders but who does not originate real estate morgages. |
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| Creating a mortgage by lending money to real estate borrowers. |
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| A specialist within a lending institution who finds real estate borrowers and facilitates their borrowing funds thereby creating mortgage assets. |
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| A real estate loan backed by the collateral of the real estate itself that is generally long term and designed to cover the operating period of the real estate, as opposed to covering the short-term development or construction period. |
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| A real estate professional who manager the day-to-day operations of real estate assets. |
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| The information from a real estate transaction that is often considered to be private by parties to the transaction (buyers and sellers), which contributes to the inefficiency of real estate markets. |
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| The purchase of real estate motivated by the potentional for financial gain |
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| Real estate investment analysis |
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Definition
| The application of tools and techniques to evaluate real estate investment opportunities |
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| Real estate investment trust REIT |
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Definition
| A corporate form of real estate ownership that enjoys special tax treatment as long as specific investment and distribution rules are met |
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| A generic term applied to the network of arrangements and relationships functioning to transmit information about product and prices so that buyers and sellers of real estate can make rational decisions and conduct informed real estate trades. |
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| The legally recognized rights associated with the ownership of real estate |
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| Savings and loan association |
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| A financial institution specializing in the banking and financial needs of households, which typically makes long term , permanent home loans |
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| Secondary mortgage market |
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Definition
| The sale of mortgages or assets derived from mortgages to investors. |
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| The process of converting the rights to receive income from real estate assets into derivative securities |
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| A securities expert who takes pooled real estate assets and creates derivative securities from them. |
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| The process of bidding for the purchase of an asset such as real estate, which is characterized by discrete offers - that is, offers that are received by the seller one at a time. |
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| A real estate professional, who performs the dutires of a loan correspondent by collecting and posting loan payments, following up on delinquent payments, and maintaining recores. |
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| An investment in real estate with the expectation of enjoying significant investment returns through appreciation realized at time of sale |
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| Real estate markets tend to have unique property types (residential, commercial, industrial, retail, and land) which contributes to their inefficiency. |
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| A real estate entrepreneur who specializes in purchasing controlling interests in existing real estate with the expectation of reaping returns through lease or sale. |
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| A real estate professional, working for a government tax authority, who estimates the value of property for tax purposes. |
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| A real estate professional who specializes in assessing the risk associated with real estate loans. |
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| Backed security (CMBS): A derivative investment vehicle backed by a pool of commercial mortgages and structured in a fashion similar to the residential collateralized mortgage obligation (CMO) with differing risk/return classes, called tranches. |
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| An asset whose value is derived from the value of underlying assets that back it. Examples in real estate are mortgage-backed securities and REIT shares. |
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| The negative growth in the stock of funds deposited in short-term accounts within financial intermediaries like banks and thrifts that results when depositors withdraw their funds to invest directly in superior opportunities in the capital markets |
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| The supply/demand conditions and property characteristics, inclduing physical qualities, capital improvements and situs that create real estate value in the market for space |
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| A term to describe how quickly transaction prices within a market reflect relevant market information. |
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| That price where supply and demand are in balance and all available product will be cleared from the market. |
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| Those investment returns that are in excess of what the market expects given the non-diversifiable investment risks being taken |
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| Governmented sponsored enterprise (GSE) |
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| A private corporation created by an act of Congress to stimulate and maintain the residential mortgage market. The term refers primarily to Fannie Mae and Freddie Mac. |
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| That most productive use to which a property can be physically and legally dedicated leading therefore to its maximum value. It is that use by which the market prices the property. |
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| The investment challenge typically faced by banks, thrifts and other depository financial institutions that arises when long-term investments are funded with short-term liabilities. The problem primarily occurs in periods of unanticipated inflation when income adjustments fail to keep up with the rising cost of borrowing |
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| Mortgage-backed security (MBS) |
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Definition
| A derivative asset whose value is supported by a pool of mortgages and whose cash flow is derived from the debt service received from the mortgage pool. MBSs can take several forms and may be backed by either residential or commercial mortgage pools. |
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Definition
| The process of creating mortgage-backed securities. See Mortgage-backed security above. |
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| Secondary mortgage market |
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| The investment market for whole mortgages and for mortgage-backed securities as opposed to the primary mortage market where mortgages are created between lenders and borrowers. |
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| The unique locational profile of a real estate site including the quality of its exposure and accessibility to neighboring activities and infrastructure. |
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| The popular name for that market serving residential mortgage borrowers who do not qualify for standard hence prime mortgages. |
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| The systematic reduction of debt through a series of scheduled principal repayments that lead eventually to the complete extinction of the loan. |
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| A table that shows all payments made over the life of a loan. For each payment the amount going to interest, the amount going toward principal reduction, and the amount of the loan balance after the payment is made are specified |
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| A specific type of income stream characterized by equal periodic payments over its life. |
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| The process of determining the future value of an income stream by applying appropriate time value of money concepts. |
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| The process of determining the present value of an income stream by applying appropriate time value of money concepts. |
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| By virtue of the power of money to earn interest, the value that an income-producing asset will enjoy at some specified time in the furture. The process of determing future value is called compounding. |
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| Internal rate of return (IRR) |
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Definition
| That rate of return that exactly equates the investment outflows with the investment inflows once we consider the timing of the cash flows. |
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| The discounted value of an income-producing asset considering both cash inflows to the asset owner and cash outlfows from the asset owner. |
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| By virtue of the power of money to earn interest, the value an anticipated future income stream enjoys at the present (time zero) |
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| That portion of investment cash inflow designated as the repayment of invested capital |
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| That portion of investment cash inflow designated as the interest earned on invested capital |
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| Concepts developed around the argument that capital is entitled to a return. Application of these concepts results in mathematical equations used to discount and compound income producing assets. |
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