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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…

Metropolitan Statistical Area

A Metropolitan Statistical Area, or MSA, is an area that usually includes a major city at its core and the surrounding towns and suburbs. It is not a legal area that is governed by any one entity, but an area to which numerous towns and a city,…

Hectare

A unit of land that equals 10,000 square meters or 107,639 square feet.

OS&E

OS&E is a common initialism used in the hotel industry for Operating Supplies and Equipment. OS&E refers to an enormous range of items that a hotel will need to operate. OS&E does not include items like stoves or washing machines…

Adverse Possession

Also referred to as Squatter's Rights, adverse possession enables a person living on or using someone else's property to legally take ownership of said property if the original owner has abandoned and/or not claimed ownership over a certain…

Rent Control

Law that dictates the amount of rent a property owner/landlord can charge a tenant.

Subcontractor

A company that specializes in a specific component of a project and is hired by the General Contractor and/or ownership to work on a development project. Some examples of subcontractors are plumbing, electrical, HVAC, drywall, glazing, insulation,…

General Contractor

An entity that oversees the execution of a construction project on behalf of the ownership of a property. The General Contractor manages the day to day operations on site and oversees all the subcontractors.

Core

See Core - (investment strategy) or Core - (structural)

Joint Tenenacy

An ownership of real property by two or more people whereby if one person dies, the ownership held by the deceased passes on to the surviving owners.

Leasing Commissions

A commission, generally paid by the landlord to a leasing broker, for procuring a tenant for a rentable piece of real estate. Leasing Commissions are typically paid at the start of the lease, and are commonly paid both when a new tenant occupies…

Real Estate Investment Trust (REIT)

A real estate mutual fund, allowed by income tax laws to avoid the corporate income tax. It allows investors, large and small, to participate in large real estate ventures, without double taxation. A REIT sells shares of ownership and must invest…

Net Effective Rent

The gross amount of rent payable by a tenant less any costs incurred by the landlord in order to lease the space to the tenant. Such costs typically include leasing commissions, tenant improvements and/or rent-free periods. Net Effective Rent…

Funds from Operations

A widely accepted metric used to analyze the performance of a REIT. Funds from Operations, or FFO, accounts for the fact that net income on a REIT’s income statement may be an inaccurate representation of the REIT’s true performance. As…

Rentable Area

Rentable area is the area within a building to which a landlord can charge rent. This includes the tenants' private and/or exclusive use space, as well as the building's common areas. Tenants usually pay rent for their exclusive space plus…

Load Factor

Rentable area / usable area = load factor Example: If a building has 50,000 sf of rentable area and 40,000 sf of usable area, the building has a load factor of 1.25 (50,000/40,000)