, , ,

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…

Weighted Average Lease Term

A metric in commercial real estate that measures how much contract rent is remaining at the property.  Specifically, the WALT measures the weighted average remaining contract lease term for all tenants at a property. Generally rental income…

1031 Exchange

A common real estate practice with origins in the IRS code section 1031, which allows investors to essentially swap one property for another in an effort to defer capital gains taxes. The two properties must be "like-kind" properties and used…

Build-for-Rent

See also 'Build-to-Rent'. In commercial real estate, Build-for-Rent (BFR) refers more generally to an investment approach where a developer undertakes the construction of a project with the explicit intention of leasing it out to one or more…

Interest Rate Cap

An interest rate cap is a type of derivative contract that provides the purchaser with protection against rising interest rates. It sets a maximum (or cap) level on the interest rate on a floating or variable rate loan. If interest rates rise…

Interest Rate Collar

An interest rate collar is a combination of an interest rate cap and an interest rate floor. It serves to limit the range of interest rate fluctuations on a variable-rate loan. A borrower who uses a collar agrees to an upper limit on the rate…

Interest Rate Swap

An interest rate swap is a financial contract in which two parties agree to exchange one stream of interest payments for another, over a set period. Typically, this involves swapping fixed-rate loan payments for variable-rate payments, or vice…

Levered

The term "levered" or "leveraged" refers to the use of borrowed funds or debt to finance an investment in a property. Leveraging allows investors to increase their potential returns by using a smaller amount of their own capital and borrowing…

Pro Forma

A financial projection that provides an estimate of the potential income, expenses, and profitability of a real estate investment or development project. Typically used for planning, analysis, and decision-making purposes, a real estate pro…

CBD

See Central Business District.

CCRC

See Continuing Care Retirement Community.

Duration

See Mortgage Loan Duration.

EGR

See Effective Gross Revenue.

GMP

See Guaranteed Maximum Price.

Garden Apartment

Low-rise apartments set on a sizable, landscaped plot and typically operate under a single management. They are characterized by being surrounded with lawns, trees, and gardens. These apartment subtypes will most likely offer access to a backyard…

Front-load

Front-load warehouses have the loading docks on the front of the building, in relation to the street from which trucks enter.