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Real Estate Financial Modeling Accelerator (Updated October 2024)

Prior to launching the Accelerator program, Michael and I fielded email after email requesting a more structured real estate financial modeling training program on the site. Over the years, we've covered hundreds of real estate modeling…

Usable Area

The portion of a property available for the exclusive use and control of a tenant, generally encompassing areas where the tenant can place personnel, furniture, and equipment. Per the Building Owners and Managers Association International (BOMA)…

Unlevered Cash Flow

The net cash inflows and outflows of a real estate investment before taking into account cash flows related to financing.  Unlevered cash flows generally consist of total investment costs, net operating cash flows before financing, and asset…

Urban Infill

Repurposing property in an urban environment for new development. The term implies that the surrounding area is mostly built up and what is being developed will “fill in” the gaps. Urban infill usually focuses on repositioning underutilized…

Unlevered

The term "unlevered" or "unleveraged" refers the state of a real estate investment, cash flow, or financial metric without (or before) the use of debt. The term unlevered (or unleveraged) is often used in conjunction with certain financial and…

Value Add

A real estate investment strategy categorized by medium-risk and medium returns. A Value-Add Strategy typically involves acquiring under-performing assets with upside potential and adding value through one or more repositioning strategies. These…

UCC Foreclosure

Related to UCC Article 9, this type of foreclosure generally occurs when there is mezzanine debt encumbering the property. When a mezzanine borrower breaches any term or is in default, the mezzanine lender has the option to foreclose on the…

Bankability

Bankability is a quotient that communicates the seriousness of intent of the developer to the lenders. Here are a few concerns about developers that lenders might have: What's the developer’s "skin in the game?" What is the developer…

Wrap Up Insurance

A comprehensive insurance policy designed specifically for larger construction projects. Wrap Up Insurance encompasses general liability insurance, worker’s compensation, and excess liability coverage, offering a unified solution that extends…

Warehouse

Warehouse is a sub-type of the Industrial Property Type in commercial real estate used primarily for the storage and distribution of goods. These properties are typically one-story buildings with high ceilings to maximize vertical storage space. They…

Valet Trash

A property management service primarily utilized in multifamily residential buildings whereby the landlord or management provides doorstep collection of residents' garbage. The collected trash is then transported to a designated waste disposal…

Balance Sheet Investing

When an investor uses its own funds to invest in a real estate asset. This is in contrast to using 3rd party funds (when referring to equity) or securitization proceeds (when referring to debt). Putting 'Balance Sheet Investing' in Context Imagine…

Acuity Spectrum

A range of care which encompasses the categories within senior living. The continuum typically ranges (in order of increasing acuity) from independent living to assisted living to memory care to nursing care. Putting 'Acuity Spectrum' in…

Balloon Payment

The final payment on a loan. In commercial real estate, the balloon payment is the entire outstanding balance of the loan as of the loan maturity date. A balloon payment is only due when the loan has not fully amortized. For instance, a lender…

Under Water

Under Water refers to a financial condition in which the outstanding balance of a property's mortgage exceeds the property's current market value. This situation creates significant constraints for the property owner, limiting their ability…

Variable Costs

Operating expenses that vary based upon of the property’s level of operation. For example, property management fees vary directly based on the property’s revenue and therefore will likely be higher the greater the occupancy of the building.…