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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…

Sponsor

The partner that "sponsors" a real estate investment, this individual or company is responsible for finding, acquiring and managing the investment. The sponsor generally brings market and property type expertise and plays the primary management…

Tenants in Common (TIC)

An ownership structure whereby two or more individuals may own an equal or unequal undivided share in a property. This partnership structure enables lower income investors the opportunity to purchase more expensive real estate which they otherwise…

Tenant Improvements

A form of inducement typically seen in office, retail, and industrial real estate; tenant improvements (TIs) are physical changes to a tenant's leased space to accommodate the specific needs of the tenant. TIs may include building or moving…

Tenant Rollover Risk

The risk associated with expiring lease agreements at a property. This risk includes the possibility of not being able to re-lease the space should a tenant vacate or alternatively, the possibility of signing a lease but on less favorable terms…

Occupancy Cost Percentage

Also referred to as the Tenant Health Ratio, Occupancy Cost Percentage represents a retail tenant’s total annual occupancy cost as a percentage of total annual tenant sales at the property. This metric is used by investors in retail real estate…

Tenant Estoppel Certificate

A formal document executed by a tenant to affirm the current status and terms of their lease agreement. The Tenant Estoppel Certificate, also referred to as the tenant estoppel letter, confirms critical lease details such as payment history,…

Lessee

Someone who leases or rents space. Someone who pays rent to the owner or lessor in order to occupy a space. The lessee holds the right to occupy and use property or land in accordance with the terms specified in a lease agreement. Commonly used…

Tax Increment Financing

A fiscal tool employed by municipal governments to foster urban renewal and development in designated areas. In a TIF district, the tax revenue generated by any increase in property values above a predetermined baseline is diverted into a TIF…

Temporary Certificate of Occupancy

An official document issued by a local building authority or other designated agency that authorizes the temporary use or occupancy of a building or structure before the completion of all construction. This certificate confirms that the premises…

Estoppel

A legal doctrine that prevents a party from denying or asserting anything to the contrary of that which has been established as fact by their own actions or words. In commercial real estate, this principle is commonly applied in various agreements,…

Tenant

A business, organization, or individual that occupies property or land rented from a landlord or lessor under a lease agreement. In commercial real estate, this term typically refers to entities who lease spaces such as offices, retail locations,…

Tenancy By The Entirety

A form of joint property ownership in the United States, exclusive to married couples, where each spouse is considered an indivisible owner of the entire property. Tenancy by the Entirety contrasts with other joint ownership forms like tenancy…

Tenant Health Ratio

Also known as Occupancy Cost Percentage, the Tenant Health Ratio is a key financial metric in retail real estate used to evaluate the economic sustainability of a tenant within a retail property. It is calculated by dividing the total annual…

Takeout Loan

A form of permanent financing utilized to retire existing short-term debt, such as construction loans or bridge loans. Commonly known in the industry as a construction loan takeout or bridge loan takeout, these loans are structured with extended…

Build-to-Rent

Build-to-rent, or BTR, generally refers to the development of single-family homes or duplexes within a neighborhood, all owned by a single entity, and designed specifically for rental purposes. This model diverges from traditional single-family…