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Commercial Properties, Commercial Buildings and Real Estate Glossary of Comercial Terms and Definitions

You will find some common and not so common terms used in real estate in Commercial real estate buildings and commercial real estate properties in Ontario, Canada and in the United States. I hope you find this useful. If you have any questions or require further information, please email me.

Glossary of Commercial Mortgage

Terminology

Glossary of Commercial Mortgage Terms

(Building)

Glossary abbreviation for Building tab.

(IE)

Glossary abbreviation for Income/Expense tab.

(LA)

Glossary abbreviation for Leasing Assumptions tab.

(Loan Quote)

Glossary abbreviation for Loan Quote tab.

(Loan)

Glossary abbreviation for Loan tab.

(Menu)

Refers to the LoanSizer Menu Bar.

(Property)

Glossary abbreviation for Property tab.

(RR)

Glossary abbreviation for Rent Roll tab.

(UI)

Glossary abbreviation for Underwriter Info tab.

10 pads Unit Density

Refers to the number of mobile home pads as being 10 pads per acre; represented by

density of land coverage.

10 Yr US Treasury

An index rate; a published interest rate (or interpolation of rates) usually corresponding to

the current yield of a US Treasury note or bond, Prime Rate, LIBOR, etc. The Final Note

Rate is typically equal to the sum of the index rate plus the spread. Index rate yields are

typically published in daily papers by financial information services (e.g. Wall Street

Journal, Bloomberg).

100% Sprinklered

Identifies whether all areas of the building are sprinklered; a sprinkler system is typically

an automatic fire-suppression system with an audible alarm and that disperses an area

with water or fire retardant from overhead sprinklers when excessive heat and/or smoke

is detected. Fire systems are typically wet, dry or chemical systems.

30/360

An interest rate accrual method in which the interest calculation assumes that all 12

months of a calendar year have 30 days and uses a 360-day year. An Actual/360 interest

calculation charges interest for all 365 calendar days using a 360-day year. Therefore,

borrowers pay 5 days less interest than under Actual/360. The Actual/360 interest

calculation produces an effective interest rate that is 12 basis points higher than that

produced by the 30/360 interest calculation.

< 10 pads Unit Density

Refers to the number of mobile home pads as being less than 10 pads per acre;

represented by density of land coverage.

> 10 pads Unit Density

Refers to the number of mobile home pads as being greater than 10 pads per acre;

represented by density of land coverage.

Above Average

Refers to a superior overall appearance and marketability of the property as it relates to

other comparable properties in the market or submarket; factors include actual and

effective age, structural and aesthetic appeal, physical condition, functional utility, etc.

Acre

A measure of land equal to 43,560 square feet, 4,840 square yards or 160 square rods. A

square parcel of land measuring 208.71 feet on each side contains one acre. There are

640 acres in a "section" of land.

Actual 360

An interest rate accrual method in which interest calculation charges interest for all 365

calendar days using a 360-day year. A 30/360 interest calculation assumes that all 12

months of a calendar year have 30 days and uses a 360-day year. Therefore, borrowers

pay 5 days more interest than under 30/360. The Actual/360 interest calculation produces

an effective interest rate that is 12 basis points higher than that produced by the 30/360

interest calculation.

Actual 365

An interest accrual method in which the annual interest will be divided by a 365 day year,

and the interest for each interest period will be the interest for the actual number of days

in that period. The number of days in the year for periodic calculation is usually one of

three choices: 1) actual days in the year (365 or 366 for leap years), 2) always 365 days,

or 3) always 360 days (based on 12 x 30-day months). Each interest basis reflects a

choice for computing the number of days in the interest period and the number of days in

the year in which interest is paid. Municipal and corporate bonds use the 30/360 basis,

and government bonds use Actual/Actual. T-bill discounts are calculated on an

actual/360 basis. Many variable rate municipal bonds are based on Actual/Actual or

Actual/365.

Actual/Actual

An interest accrual method in which the annual interest will be divided by a 365 or 366

day year, and the interest for each interest period will be the interest for the actual

number of days in that period.

Adequate - Ease of Ingress/Egress

Refers to a good degree of capacity to enter and exit a property.

Adequate Truck Turnaround

Refers to a good degree of capacity and ability for tractor-trailers to maneuver on the

property; based on the size and shape of the land. For example, an odd-shaped or oddsized

parcel of land may be appropriate for an office but may provide limited functionality

for industrial loading and delivery.

ADO - Average Daily Occupancy

A ratio, expressed as a percentage, that shows the average number of paid guests for

each room sold; calculated by dividing number of paid room guests by number of rooms

sold. Measures management's ability to effectively operate and promote the lodging

facilities.

ADR - Average Daily Rate

A hotel rate used to evaluate the average daily rate of a hotel inclusive of vacancy and

seasonality; the average rate charged by a hotel for one (1) room for one (1) day; arrived

at by dividing the total room revenue by the actual rooms occupied. A measurement used

to guage the financial competitiveness of the market for similar properties, facilities

and/or guest rooms.

Advertising & Marketing

An expense line item that includes expenses for advertising, promotion, sales, and

publicity managers, secretaries and clerks and all related printing, stationary, artwork,

magazine space, broadcasting, and postage related to marketing.

All Exterior Guest Corridors

Identifies that all of the corridor area(s) through which guests gain access to sleeping

rooms are exterior (e.g. walkways that are subject to weather conditions.

All Interior Guest Corridors

Identifies that all of the corridor area(s) through which guests gain access to sleeping

rooms are interior and enclosed (e.g. walkways that are not subject to weather

conditions).

All Paved - Road Surfaces

Identifies all of the road surfaces as being paved with macadam, concrete, cement or

other similar surfacing.

Amortization

Identifies the loan amortization that is being quoted (in years); the period of time over

which principal and interest payments are scheduled. For example, a loan with a 10-year

term and a 25-year amortization will have a balloon payment at the end of 10 years. Also,

the maximum number of periodic installments (expressed in years) over which repayment

of a mortgage debt is calculated; a portion of each payment consists of a blend of interest

and amortization of principal.

Anchor

Identifies whether the tenant is an anchor tenant. An anchor tenant is a well-known

commercial business such as a national chain store, regional department store or

Fortune 500 company strategically placed in a shopping center or other commercial

building.

Annual Rent

Identifies the total annual rent, or base rent, paid by the tenant to the lessor.

Anticipated Closing Date

If the Loan Purpose is Purchase, identifies the anticipated or desired closing date of the

sale transaction.

Anticipated Completion Date (Property)

If the Loan Purpose is Construction, identifies the anticipated completion date of

construction.

Appearance (Building)

In LoanSizer, used to describe the overall appearance and marketability of the property

as it relates to other comparable properties in the market or submarket; factors include

actual and effective age, structural and aesthetic appeal, physical condition, functional

utility, etc.

Application Fee (Loan Quote)

A fee or schedule of fees charged by a lender at the time of loan application. This fee

may include the cost of an appraisal, credit report, processing fee or other closing costs

which are incurred during the process or the fee may be in addition to other charges.

Appraisal (Property)

An estimate of the value of a property, made by a qualified professional called an

appraiser; results in the estimated market value of the property.

Appraisal Date (Property)

Identifies the date of value on the last appraisal made on the property.

Appraisal Fee (Loan Quote)

A quoted or estimate fee to cover the cost of the appraisal required by the lender to

obtain a mortgage.

Appraised Value (Property)

Identifies the indicated value or <fair> market value based on the last appraisal made on

the property.

Asking Rent

Rental rate offered by the landlord to a prospective tenant; see Est. Market Rent.

Assisted Living

A Healthcare subtype; provides apartment-style accommodations where services focus

on providing assistance with daily living activities. These facilities are designed to bridge

the gap between independent living and nursing home care, and provide a higher level of

services for their residents including meals, housekeeping, medication assistance,

laundry, and regular checks-ins.

Assumption Fee (Loan Quote)

A fee, paid a borrower or lender, for the paperwork and processing of records necessary

to approve and document a new debtor.

At Grade

Identifies the height or elevation of the primary loading docks on the building; at grade

refers to a door level with the ground at the foundation of a building.

Available Funds

All funds available or collected, including prepayments, servicer advances , etc.

Available Funds Cap

Limited amount of interest payable to certificate holders to the extent of interest accrued

on a group/pool of mortgage loans.

Average

Refers to an average or similar overall appearance and marketability of the property as it

relates to other comparable properties in the market or submarket; factors include actual

and effective age, structural and aesthetic appeal, physical condition, functional utility,

etc.

Avg. Lease Term (UI)

The average term (or length) of all leases encumbering the collateral property, expressed

in years.

Avg. Quality Metal General Building Exterior

Identifies the general property exterior to be constructed of average quality metal or

prefabricated metal.

Bankruptcy

Identifies whether a borrowing entity has filed for bankruptcy in the past. Bankruptcy -

court proceedings to relieve the debts of an individual or business unable to pay its

creditors. An individual, firm, or corporation who, through a court proceeding, is relieved

from the payment of all debts. Bankruptcy may be declared under one of several

chapters of the federal bankruptcy code.

Base Month

The month in which the instrument begins; in a lease, base month is the month in which

the lease starts. In a mortgage note, base month is the month in which the mortgage note

is executed.

Base Rent

The minimum stipulated rental rate in a lease agreement before adjustments for lease

concessions (if any); also the minimum fixed guaranteed rent in a commercial property

lease; separate from any overages or additional rental fees.

Base Year

The year in which the instrument begins; in a lease, base year is the year in which the

lease starts. In a mortgage note, base year is the year in which the mortgage note is

executed.

Below Average

Refers to an inferior overall appearance and marketability of the property as it relates to

other comparable properties in the market or submarket; factors include actual and

effective age, structural and aesthetic appeal, physical condition, functional utility, etc.

Blanket Loan

Refers to a mortgage that covers more than one parcel of real estate owned by the

mortgagor.

Borrower Affiliated (RR)

Identifies whether the tenant is affiliated or related to the borrower. Often, the rental rate

per square foot (or unit) paid the borrower-affiliated tenants may be less than or greater

than market rent; in which case, an underwriter might consider increasing or decreasing

the underwritten rent to normalize the income generated by the tenant (also referred to as

"mark to market").

Borrower Name (Loan)

The name of the borrower/sponsor.

Borrower Net Worth (Loan)

The value of all assets, including cash, less total liabilities. For underwriting purposes,

this is used as a guideline to indicate creditworthiness and financial strength. The net

worth of a business is represented by the amount that its assets exceed liabilities.

Borrower Type (Loan)

The legal structure of the borrower/sponsor; options include Individual, Corporation,

Limited Liability Company (LLC), Trust, Limited or General Partnership, or Other.

Both - Dock Level

Identifies the height or elevation of the primary loading docks on the building; includes

both "dock height" and "at grade" levels.

Bridge Loan

Short-term mortgage financing that is in place between the termination of one loan and

the beginning of another loan. Also, a form of interim loan, generally made between a

short term loan and a permanent (long term) loan, when the borrower needs to have

more time before taking the long term financing.

Building Appearance and Marketability (Building)

The overall appearance and marketability as it relates to typical market standards. In

LoanSizer, options include below average, average, or above average.

Building Type

Determines the primary building type; options include Office, Multifamily, Mobile Home

Park, Retail, Industrial, Healthcare, Self Storage, Hotel, and Mixed Use.

Business or Vacation Primary Guest Types

Identifies that the hotel rooms are predominately occupied by business and/or vacation

travelers.

Business Primary Guest Types

Identifies that the hotel rooms are predominately occupied by business guests.

Business/Economy Primary Guest Types

Identifies that the hotel rooms are predominately occupied by business and/or economy

guests.

Butler-Type Building (Building)

A pre-engineered metal building typically used for light industrial purposes; characterized

by pre-engineered metal walls and/or wood pole barn construction.

Cafeterias (Building)

A dining area where meals are served and eaten.

CAM & Utilities (RR)

Common Area Maintenance (CAM); Operational expenses related to the utilities and

maintenance of retail and office properties; under a Triple-Net lease the Tenant is

required to reimburse the Landlord for their proportionate amount (based on square

footage) of this expense.

Cap Ex. (IE)

An expense line item that includes expenses for anticipated capital expenditures required

to maintain a building and future capital improvements of major building systems (e.g.

HVAC, parking lot, carpets, roof, etc.). Replacement reserves are typically calculated on

a per unit basis (e.g. multifamily - per unit; office, retail, industrial - per square foot; etc.).

Capitalization Rate (UI)

A guideline provided by LoanSizer that suggests a capitalization rate for the proposed

loan. LoanSizer bases this guideline on numerous factors including property type, loan

amount, and numerous physical, financial and tenancy factors identified in the proposed

loan. Unless manually adjusted by the Originator or Lender, LoanSizer uses this

guideline as the default value to calculate loan results. The cap rate is the rate of return

on net operating income considered acceptable for an investor and used to determine the

capitalized value. This rate should provide a return on, as well as a return of, capital; also

known as "cap rate". Also, the ratio of the annual NOI to the property price (or value). The

formula is: Value = annual Income divided by the capitalization Rate (V=I/R). For

example, if a property generates $100,000 of net operating income and the capitalization

rate is 10.0%, then the capitalized value of the income stream is $1,000,000. Conversely,

if a property generated $100,000 of net operating income and was sold for $1,000,000,

then the sales cap rate is 10.0%. Cap rates are determined by various methods including

market driven (derived from comparable sales), band of investment technique (mortgageequity

analysis), Ellwood formula, Akerson format, etc.

CBD Office

An Office subtype characterized by its location in a Central Business District (CBD); the

downtown section of a city, generally consisting of retail, office, hotel, entertainment, and

government land uses with some high-density housing.

Central Business District (Property)

Central Business District (CBD); the downtown section of a city, generally consisting of

retail, office, hotel, entertainment, and government land uses with some high–density

housing.

Change Status (Menu)

Changes the Loan Status.

Check if Vacant Space (RR)

Identifies whether the leased area is vacant. If checked, LoanSizer will account for this

leased area as net rental area and will multiply the estimated market rent times the

vacant area when calculating the Potential Gross Income (PGI).

Class A

A property classification for properties that are above average in terms of design,

construction and finish; command the highest rental rates; have a superior location, in

terms of desirability and/or accessibility; generally are professionally managed by

national or large regional management companies.

Class A Office Surrounding land Use

Identifies the general land use of the surrounding and/or adjacent properties in

comparison to the collateral property. A Class A Office property classification refers to

properties that are above average in terms of design, construction and finish; command

the highest rental rates; have a superior location, in terms of desirability and/or

accessibility; generally are professionally managed by national or large regional

management companies.

Class B

A property classification for properties that frequently do not possess design and finish

reflective of current standards and preferences; construction is adequate; command

average rental rates; generally are well maintained by national or regional management

companies; unit sizes are usually larger than current standards.

Class B Office Surrounding land Use

Identifies the general land use of the surrounding and/or adjacent properties in

comparison to the collateral property. A Class B Office property classification refers to

properties that frequently do not possess design and finish reflective of current standards

and preferences; construction is adequate; command average rental rates; generally are

well maintained by national or regional management companies; unit sizes are usually

larger than current standards.

Class C

A property classification for properties that provide adequate functionality, exhibit some

level of deferred maintenance; command below average rental rates; usually located in

less desirable areas; generally managed by smaller, local property management

companies; tenants provide a less stable income stream to property owners than Class A

and B tenants.

Class C Office Surrounding land Use

Identifies the general land use of the surrounding and/or adjacent properties in

comparison to the collateral property. A Class A Office property classification refers to

properties that provide adequate functionality, exhibit some level of deferred

maintenance; command below average rental rates; usually located in less desirable

areas; generally managed by smaller, local property management companies; tenants

provide a less stable income stream to property owners than Class A and B tenants.

Clear Ceiling Height (Building)

The dominant or typical vertical measurement from the floor of the structure to the bottom

of the lowest overhead beam (under beam); expressed in feet. Also referred to as “clear

headway” or “clearance.”

Clubhouses (Building)

Identifies the number of clubhouses located on the property.

Co-op

A Multifamily subtype; characterized by its method of multiple ownership in which a

corporation or business trust entity holds title to a property, (usually an apartment

complex) and grants occupancy rights to shareholder tenants through proprietary leases.

Also called a "cooperative."

Common Area Maintenance (RR)

Identifies the method by which the tenant is responsible for payment or reimbursement of

Common Area Maintenance (CAM) and utility charges.

Community Shopping Center (Building)

Open shopping center of 100,000 - 400,000 square feet. Tenants: Supermarket and/or

department or discount store.

Conduit

The financial intermediary that sponsors the conduit between the lender(s) originating

loans and the ultimate investor. The conduit makes or purchases loans from third party

correspondents under standardized terms, underwriting and documents and then, when

sufficient volume has been obtained, pools the loans for sale to investors in the CMBS

market.

Congregate Care

A Healthcare subtype; similar to independent living, but features a community

environment, with one or more meals per day prepared and served in a community dining

room. Many other services and amenities may be provided such as transportation, pools,

a convenience store, bank, barber/beauty shop, resident laundry, housekeeping, and

security.

Construction

An event resulting in the construction, renovation or rehabilitation of real estate. In

LoanSizer, the purpose for which the loan request is being completed; options include

Purchase, Refinance, Construction.

Construction Costs (Building)

If the Loan Purpose is Construction, identifies the total cost of construction (including all

hard costs and soft costs and land acquisition cost, if applicable).

Construction Loan

A short term loan to pay for the construction of commercial buildings. These loans

typically provide periodic disbursements to the builder as each stage of the building is

completed. When construction is completed a take–out or permanent loan is used to pay

off the construction loan.

Contract Rent (RR)

Actual rent as specified in a rental or lease agreement, as opposed to actual market or

economic rent. IN LoanSizer, options include $/Yr., $/SF/Yr., $/SF/Mo. Different from

Market Rent which is the rental income that a property is likely to command in the under

current market conditions. Market rent, also referred to as economic rent, may be either

higher or lower than contract rent.

Corner Located (Property)

Identifies whether the property is has frontage on one or more streets or is otherwise

located on a corner or street intersection. For certain properties, corner location may

increase the overall appeal and marketability of the property (e.g. hotel, high-scale retail,

self-storage, etc.).

Corporate Housing (Building)

Identifies whether the multifamily property is occupied by corporate tenants. In multifamily

underwriting, clauses may be included in leases that allow the tenant to terminate the

lease without penalty if and when the tenant is transferred to another location.

Corporation

A borrowing entity structured as a group of people granted a charter legally recognizing

them as a separate entity having its own rights, powers, privileges and liabilities distinct

and separate from those of its members.

Costs Documented (Property)

If the Loan Purpose is Refinance, identifies whether the cost of the improvements (e.g.

renovations, capital improvements) made to the property following the acquisition can be

documented; usually supported by invoices or work receipts.

Covered Parking Spaces (Building)

Parking spaces under a roof or other structure designated to the specific property and/or

building.

Credit Rated (RR)

Identifies whether the tenant is an investment grade tenant with a BBB- rating or higher.

Credit Report Fee (Loan Quote)

A fee charged to obtain a credit report on the borrower or borrowing entity. A credit report

is an evaluation of a person's capacity (or history) of debt repayment. Generally available

for individuals from a local retail credit association; for publicly held companies by such

firms as Dunn & Bradstreet; and for bonds by such firms as Moody's, Standard & Poor’s,

and Fitch's.

Current Index Yield (UI)

The corresponding yield of a published interest rate, such as the Prime Rate, LIBOR,

Treasury Bill / Treasury Note rate, 11th District COFI, etc. Lenders use indexes to

establish interest rates charged on mortgages or to compare investment returns. A final

note rate typically includes an Index Yield plus a Spread.

Current Interest Rate (Property)

If the Loan Purpose is Refinance, identifies the current interest rate of the existing

mortgage note.

Current Year

The current calendar year in which the analysis takes place; generally a partial year that

results in a year-to-date representation.

Dark Space

Vacated retail space. Tenant may be still paying rent but "induced" smaller tenants may

exercise right to cancel leases with the major tenant goes "dark".

Date Acquired (Property)

If the Loan Purpose is Refinance, identifies the date on which the property was acquired.

Date of Last Sale (Property)

Identifies the date of the last sale or legal conveyance of the property.

Debt Coverage Ratio

Measures a mortgaged property's ability to cover monthly payments defined as the ratio

of net operating income over the mortgage payments. A DCR, or DSCR (debt service

coverage ratio), of less than 1.0 means that there is insufficient cash flow generated by

the property to cover required debt payments.

Debt Service Coverage Ratio (UI)

Measures a mortgaged property's ability to cover monthly payments defined as the ratio

of net operating income over the mortgage payments. A DSCR of less than 1.0 means

that there is insufficient cash flow generated by the property to cover required debt

payments.

Departmental Revenue (IE)(Hotel)

The total revenue from hotel operations that includes revenues from Food & Beverage,

Telephone, Other Departmental Revenue and Other Income.

Direct Billed Expense Reimbursement

Identifies that the cost of the associated item is directly billed to the lessee; different from

a tenant reimbursement.

Dirt/Gravel - Road Surfaces

Identifies the road surfaces as being dirt or gravel surfaced, and not paved with

macadam, concrete, cement of other similar surfacing.

Discount Margin

The difference between the price of a security and the face amount of the security.

Discount Rate

The rate applied to each year’s cash flow from a building to determine the net present

value (NPV) of a series of cash flows.

Dock Height

Identifies the height or elevation of the primary loading docks on the building; dock height

loading docks facilitate the transfer of products or materials directly from a building to a

vehicle (usually a truck or tractor trailer); dock height platforms typically allow a forklift to

drive from the building directly on to a vehicle; often with dock levelers to provide a flush

level surface.

Dock Level (Building)

Identifies the type and level of the dock facilities. In LoanSizer, options include Dock

Height, At Grade, Both or Don't Know.

Ease of Ingress/Egress (Property)

Ingress - entrance; egress - exit; in LoanSizer, capacity of Ingress/Egress relates to the

capacity and convenience of the entrance(s) and exit(s) of a property.

Effective Gross Income (IE)

Term used for an income-producing property, derived from the potential gross income,

less a vacancy factor and a collection loss amount.

Electronic Gate Access (Building)

Gated access that secures the entrances and exits to a property.

Elevatored

Identifies that the building is serviced by an elevator.

Engineering Fee (Loan Quote)

A quoted or estimate fee to cover the cost of the engineering report or property inspection

required by the lender to obtain a mortgage.

Escalator (Building)

A moving stairway consisting of steps attached to a continuously circulating belt.

Est. Market Rent (RR)

The amount for which the competitive rental market indicates property should rent. Also

referred to as "economic rent." Generally, contract lease rates are "marked to market" if

contract rent is greater than or less than market rent.

Est. Market Vacancy (Building)

The overall percentage of all units or space that is unoccupied or not rented in a market

or sub-market. On a proforma income statement a projected vacancy rate is used to

estimate the vacancy allowance, which is deducted from potential gross income to derive

effective gross income.

Excess Interest/Spread

Interest received from repayments that is greater than the interest on the certificates. It is

defined as the difference between the interest paid on the mortgage loans (net of

servicing fees) and the interest accrued on the certificates.

Exercise Rooms (Building)

Identifies the number of exercise rooms located on the property.

Existing Loan Balance (Property)

If the Loan Purpose is Refinance, identifies the remaining principal loan balance of the

existing note to be refinanced.

Exit (button)

Exits (closes) the LoanSizer program.

Expense Growth Rate (UI)

A guideline provided by LoanSizer that suggests the expense growth rate for the

proposed loan. An expense growth rate is used to calculate (or "gross up") projected

operating expenses when for the purpose of underwriting the income and expense cash

flows; this number reflects the percentage by which the cost of each expense item are

projected to increase over the following year. Unless manually adjusted by the Originator

or Lender, LoanSizer uses this guideline as the default value to calculate loan results.

Expense Matrix

see MBA Coding Matrix in Table of Contents

Expense Reimbursements (IE)

Income received from the tenant as a reimbursement of expenses paid by the landlord. In

a lease, an expense reimbursement clause stipulates that some or all of the operating

expenses paid by the landlord are recoverable (reimburseable) from the tenant; also

called expense recoveries, reimburseables, billables or pass-throughs. Recoverable

expenses are deducted as expenses and (offsetting) recoveries are treated as separate

revenue items in income and expense statements.

Extended Stay Primary Guest Types

Identifies that the hotel rooms are predominately occupied by long-term guests (usually

one week or greater).

Extraordinary Capital Exp. (IE)

Actual major capital expenditures that were not anticipated; these expenses are typically

non-recurring expenses and are generally normalized to zero.

Fannie Mae

Federal National Mortgage Association; commonly known as "Fannie Mae", the FNMA is

the largest buyer of existing mortgages. The Federal National Mortgage Association was

originally organized by the federal government in 1938 to purchase FHA-insured

mortgages. The association was reorganized in 1968 as a quasi-private corporation

whose entire ownership is private. Fannie Mae raises capital by issuing corporate stock

which is actively traded on the New York Stock Exchange and by selling mortgages out

of its portfolio to various investors.

Federal National Mortgage Association

Federal National Mortgage Association; commonly known as "Fannie Mae", the FNMA is

the largest buyer of existing mortgages. The Federal National Mortgage Association was

originally organized by the federal government in 1938 to purchase FHA-insured

mortgages. The association was reorganized in 1968 as a quasi-private corporation

whose entire ownership is private. Fannie Mae raises capital by issuing corporate stock

which is actively traded on the New York Stock Exchange and by selling mortgages out

of its portfolio to various investors.

FF&E (UI)(Hotel)

(Hotel) A guideline provided by LoanSizer that suggests the minimum required reserves

for furniture, fixtures and equipment (FF&E) for the proposed loan. LoanSizer bases this

guideline on numerous factors including property type, loan amount, proposed loan to

value and debt service coverage, and numerous physical, financial and occupancy

factors identified in the proposed loan.

FF&E / Cap. Ex. (IE)(Hotel)

Furniture, fixtures and equipment; an expense line item in hotel properties that represents

a reserve to fund the replacement of furniture, fixtures and equipment; commonly referred

to as FF&E.

FICO Score (Loan)

A credit bureau risk score produced from models developed by Fair, Isaac and Company,

Inc.; commonly known as FICO scores. Fair, Isaac credit bureau scores are used by

lenders and others to assess the credit risk of prospective borrowers or existing

customers, in order to help make credit and marketing decisions. These scores are

derived solely from the information available on credit bureau reports. Credit bureau

scores are often called "FICO scores" because most credit bureau scores used in the US

are produced from software developed by Fair, Isaac and Company (FICO). FICO scores

are presently provided to lenders by the three major credit reporting agencies: Equifax,

Experian and Trans Union.

Filed Bankruptcy (Loan)

Identifies whether a borrowing entity has filed for bankruptcy in the past. Bankruptcy -

court proceedings to relieve the debts of an individual or business unable to pay its

creditors. An individual, firm, or corporation who, through a court proceeding, is relieved

from the payment of all debts. Bankruptcy may be declared under one of several

chapters of the federal bankruptcy code.

Final Note Rate (UI)

Identifies the loan Final Note Rate that is being quoted.

Final U/W (IE)

see Final Underwritten

Final Underwritten (IE)

Income and/or expense items that have been adjusted positively or negatively to reflect a

projected, or normalized, income stream. Also called "normalized underwritten." In

LoanSizer, Final Underwritten is calculated automatically based on information contained

in the loan file.

Fitness Center (Building)

A room or area in which exercise and other fitness-related equipment is used (e.g. weight

room, Nautilus center).

Fixed Rate

A mortgage with an interest rate that remains constant for the life of the loan.

Flex Space

An Industrial property subtype in which the property is occupied by one or more tenants

and the property is utilized for industrial/office purposes. A Flex space property is typically

a one or two story building with little or no common areas, high ceilings, loan-bearing

floors and loading dock facilities; usually configured to allow a small amount of office

space in combination with light assembly or warehouse/distribution uses.

Floor-to-Area Ratio

The relationship between the total amount of floor space in a multi-story building and the

base of that building. FARs are dictated by zoning laws and vary from one neighborhood

to another, in effect stipulating the maximum number of stories a building may have.

FNMA/DUS Financing

A loan program through a lender designated by Fannie Mae who originates, underwrites,

closes, and services Fannie Mae approved multifamily mortgage loans.

Food & Beverage Exp. (IE)(Hotel)

An expense line item for hotel properties. Food expenses represent the expenses related

to food revenue, including functional areas such as breakfast, lunch and dinner

restaurants, room service, carry out, lounge food, sundry/merchandise, banquet food and

kitchen. This item includes food cost of sales, salaries and wages, payroll taxes and

benefits, and other related expenses such as advertising, china/glass/silver, cleaning

supplies, contract cleaning/labor, decorations, entertainment, equipment rental,

glass/plastic supplies, guest satisfaction/supplies/transportation, happy hour appetizers,

in-room entertainment, kitchen fuel, laundry allocation, licenses, linen, menus,

miscellaneous, napkins, office supplies, operating supplies, over/(short), paper supplies,

preparation supplies, printed supplies, promotion, telephone admin., training materials,

uniforms, etc. Beverage expenses represent the expenses related to beverage revenue

(bar and banquet bar), including beverage cost of sales, salaries and wages, payroll

taxes and benefits, and other related expenses such as advertising, Cable TV,

china/glass/silver, cleaning supplies, contract cleaning/labor, decorations, entertainment,

equipment rental, glass/plastic supplies, guest satisfaction/supplies/transportation, happy

hour appetizers, in-room entertainment, laundry allocation, licenses, linen, menus,

miscellaneous, napkins, office supplies, operating supplies, over/(short), paper supplies,

printed supplies, promotion, telephone admin., training materials, uniforms, etc.

Food & Beverage Revenues (IE)(Hotel)

A revenue line item for hotel properties. Food & Beverage revenues represent the income

from functional areas such as breakfast, lunch and dinner restaurants, room service,

carry out, lounge food, sundry/merchandise, banquet food and kitchen and all beverage

revenue (bar and banquet bar).

Food and Beverage

In hotel operations, when the food and beverage department is managed independently

from the general hotel operations.

Foreclosure

The process by which a mortgagee (lender) takes back a property on which the

mortgagor (borrower) has defaulted. A servicer may take over a property from a borrower

on behalf of a lender. A property usually goes into the process of foreclosure if payments

are more than 90 days past due.

Franchise Affiliated (Building)(Hotel)

(Hotel) A franchise agreement allows the hotel to operate under a particular brand name

and assures the hotel will be competently managed. Most hotels rely on their franchise

agreement to give the property a brand name, to identify and define the service the hotel

sells, and to produce a large percentage of its reservations. Franchises, or flags, include

Holiday Inn, Marriott, Hilton, Comfort Inn, etc.

Franchise Fees (IE)(Hotel)

An expense line item representing the undistributed expenses (fees) related to the

franchise including royalties, national advertising, and administration of frequent guest

stay or similar programs. These fees can include part of an initial purchase requirement

plus an ongoing percentage of gross sales of the business.

Franchise Name (Building)(Hotel)

(Hotel) The name of the franchise (e.g. Holiday Inn, Marriott, Hilton, Comfort Inn, etc.)

Freddie Mac

Federal Home Loan Mortgage Corporation.

Free Standing Retail

A Retail property subtype in which the property is occupied by one tenant and the

property is utilized for retail purposes; fast-food franchises and high-scale retail stores are

often free-standing buildings; sometimes called "big-box"; typical gross building area

ranges from 2,000 to 100,000 square feet.

Freight Elevator (Building)

An elevator used to carry freight, typically separate from a passenger elevator. Elevators

should be adequate in terms of speed, load capacity, safety, number, and they should be

able to meet peak period demands. Appraisers judge the adequacy of elevators using

established standards (e.g. one elevator per 25,000-40,000 square feet of GBA). Elevator

service impacts the overall functionality of the property.

Full Recourse

Identifies whether the lender accepts full-recourse loan requests from the LendingApps

matching engine; completed by the lender. This entry can be modified by the lender at

any time from the Lender Administration screen.

Full Service - Luxury Hotel

A Full Service Hotel property subtype typically has a full array of services available to the

traveler. The extent of these amenities varies, depending on the type of the hotel/motel

(star rating, etc.), particular chain, etc. However, at a bare minimum, the property should

offer: on-site restaurant or dining facilities; meeting or banquet rooms; swimming pool;

and 24-hour lobby/front desk. Other amenities frequently found in full-service facilities

include: business centers; one or more retail shops to serve guests; more extensive

health clubs; and transportation to and from airports or other nearby destinations. Floor

plans of the guest rooms vary the most of any type of hotel property, from basic guest

rooms, to "junior" suites, to larger suites suitable for VIP parties. This type of property is

usually the most susceptible to profitability pressure, due to the fact that there are

relatively high operating costs, due to the full service nature of the property, while the

same time there is pressure on revenues, due to the fact that the property often

competes with limited service properties in close proximity, which can charge lower room

rates. This subtype typically ranges from 500-room resorts to 300-room all-suite hotels.

Luxury hotels would include Crowne Plaza , Doubletree, Embassy Suites, Hilton, Hyatt,

Marriott, Omni, Radisson, Residence Inns, Sheraton, Stouffer Hotels, Sonesta and

Westin, in addition to a wide array of well-known independent hotels.

Full Service - Midscale Hotel