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Commercial Terms N - Z
Nearest 1/8th
An interest rate rounding method in which the final note rate is rounded up or down to the
nearest 0.125%.
Neighborhood Shopping Center
Open shopping center of less than 100,000 square feet. Tenants: Provides daily
essentials and everyday services
Net Cash Flow
Total income less operating expenses, adjustments, capital expenditures, tenant
improvements and leasing commissions; does not include mortgage payments.
Net Effective Rent
Rental rate adjusted for lease concessions.
Net Operating Income
Referred to as NOI. Total income less operating expenses, adjustments, etc., but before mortgage payments, tenant improvements and leasing commissions.
Net Rental Area
In a building, the floor space that may be rented to tenants or the area upon which rental
payments are based. Generally excludes common areas and space devoted to the
heating, cooling, other equipment of a building, hallways, lobbies, elevator shafts, etc.
Net Worth
Total assets minus total liabilities of an individual or company. For a company, also called
owner's equity or shareholders' equity or net assets.
Net-Net Lease
Usually requires the tenant to pay for property taxes and insurance in addition to the rent;
referred to as NN.
Net-Net-Net Lease
See Triple-Net Lease; referred to as NNN.
NNN Reimbursement Structure
A lease structure that requires the tenant to pay for property taxes, insurance and
maintenance in addition to the rent (also referred to as "Triple Net Lease").
No Rounding
An interest rate calculation method in which the final note rate is not rounded.
No. Occupied Units (Multifamily)
Identifies the number of currently occupied units.
No. of Elevators
Identifies the number of elevators in a building including passenger and freight elevators.
No. of Occupied Beds (Healthcare)
Identifies the number of currently occupied beds.
No. of Pad Sites
Identifies the number of individual freestanding sites or parcels of land comprising the
property; often adjacent to a larger shopping center. Pad sites are typically leased by
national retailers and fast food restaurants; usually structured as long-term ground leases
in which the improvements (buildings) are commonly leasehold improvements (owned by
the tenant).
No. of Parking Spaces
The total number of designated parking spaces available at the building or on the
property; includes all surface spaces and garage structure spaces.
No. of Stories
The number of stories (or floors) in a building; if multiple buildings, enter the greatest
number of stories of all buildings.
No. of Vacant Beds (Healthcare)
Identifies the number of currently vacant beds.
No. of Vacant Units (Multifamily)
Identifies the number of currently vacant units.
Non-Recourse
A mortgage in which the lender will not pursue personal liability against the borrower. The
lender's security is the real estate being financed. Usually subject to standard carve outs
including fraud and misrepresentation.
Notice of Default
To initiate a non-judicial foreclosure proceeding involving a public sale of the real
property securing the deed of trust, the trustee under the deed of trust records a Notice of
Default and Election to Sell the real property collateral in the public records.
Number of Buildings
Identifies the number of buildings on the property; including outbuildings.
Number of Docks
Identifies the number of loading docks on the property. A dock is an elevated floor or
platform, usually at dock height (truck bed) or at grade (freight floor height) above ground,
to facilitate the transfer of goods to or from a vehicle. Generally, facilities for loading and
unloading trucks and freight cars may be important to retail and industrial buildings. In
LoanSizer, options include Dock Height, At Grade, Both or Don't Know.
Number of Pad Sites
Identifies the number of pad sites on the property. Generally, a pad site is an allocated
section of land (either subdivided, un-subdivided or assembled) that is leased as vacant
land upon which the lessee constructs a building; a land lease (e.g. free-standing Fast
food restaurants located adjacent to a regional mall that shares the same parking area).
Nursing Home
A Healthcare subtype; an entity that provides skilled nursing care and rehabilitation
services to people with illnesses, injuries or functional disabilities. Most facilities serve the
elderly. However, some facilities provide services to younger individuals with special
needs such as the developmentally disabled, mentally ill, and those requiring drug and
alcohol rehabilitation. Nursing homes are generally stand alone facilities, but some are
operated within a hospital or retirement community.
Nursing Stations
An area or room in a health care facility where the nursing and medical staff are centrally
located.
Nursing/Medical Income
Income from nursing and medical services associated with healthcare facilities.
Occupancy (Hotel)
Annual occupancy expressed as a percentage, based on the ratio of total occupied
rooms to total available rooms.
Occupied Date (tenant)
Identifies the first date on which the tenant physically occupied the leased area.
Office
A general property type or building type classification characterized by its usage for office
purposes. Subtypes may include Suburban Garden Office, Suburban High Rise,
Medical Office, CBD Office.
Office Only Sprinklered
Identifies whether only office 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.
Office Surrounding land Use
Identifies the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. Office uses include most uses involving the
carrying on of business.
Office Tenant Type
Characterizes the tenant type based on usage of the leased area; Office usage generally
includes most uses involving the carrying on of business.
Operating Expense Ratio (Hotel)
The ratio of total operating expenses, excluding debt service, to effective gross income.
Also, a comparison of the operating expenses to potential gross income. This ratio can
be compared over time and with that of other properties to determine the relative
operating efficiency of the property considered.
Option Terms
Identifies the length of time of the prescribed period or periods as stipulated in the lease
agreement.
Other Anchored Retail
A Retail property subtype in which the property is occupied by one or more tenants
including at least one anchor tenant and the property is utilized for retail purposes.
Other Borrower Type
A borrowing entity other than a Corporation, LLC, Trust, Limited or General Partnership
or Individual.
Other Departmental Revenue (Hotel)
Income from all departments including Room Revenue, Food & Beverage, Telephone
and Other Departmental Revenue.
Other Expenses
An expense line item that includes items not specifically associated with other expense
line items.
Other Income
Income from sources not specifically associated with other named income sources.
Other Real Estate Owned
A term used primarily by commercial banks to identify real estate on the books that was
taken back through foreclosure of a mortgage loan. The term “Other” REO is used by
banks to distinguish foreclosure real estate from bank real estate owned (REO) which is
corporate real estate assets. Typically, the real estate industry uses the term REO for
foreclosed real estate.
Outbuilding (Hotel)
A building or structure that supports the primary use of the property (e.g. in hotels, an
outbuilding may include a health club, maintenance garage, service building, etc.).
Outlet Center
A Retail property subtype in which the property is occupied by multiple outlet-type or
discounter tenants grouped together in one setting; these centers may attract bargain
shoppers.
Overall Appearance & Marketability
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.
Owner Occupied
Identifies whether all or part of the property is occupied by the owner or any agent or
representative of the owner. In commercial underwriting, owner-occupied space may be
marked to market if there is a difference between contact rent and market rent.
Pad - Ground Tenant Type
Characterizes the tenant type based on usage of the leased area; a parcel of land
subdivided from a larger parcel upon which a lessee constructs a building; pad sites are
typically located around shopping malls and in high-scale retail areas. Generally, pad
sites are located close to a street or freeway or close to an entrance or exit of a mall or
shopping center.
Pad - Improved Tenant Type
Characterizes the tenant type based on usage of the leased area; a parcel of land
subdivided from a larger parcel upon which is improved a freestanding building or
buildings; pad sites are typically located around shopping malls and in high-scale retail
areas. Generally, pad sites are located close to a street or freeway or close to an
entrance or exit of a mall or shopping center.
Pad Sites
Individual freestanding sites or parcels of land comprising the property; often adjacent to
a larger shopping center. Pad sites are typically leased by national retailers and fast food
restaurants; usually structured as long-term ground leases in which the improvements
(buildings) are commonly leasehold improvements (owned by the tenant).
Parking Income
Income from parking and garage operations associated with the property.
Partial Recourse
Identifies whether the lender accepts partial-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.
Partial Recourse
A combination of recourse and non-recourse conditions in a loan.
Partially Sprinklered
Identifies whether only portions of the property 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.
Passenger Elevator
An elevator used to carry people, typically separate from a freight 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.
Payroll & Benefits
A line item expense that includes the payroll and benefits expenses of all employees
involved in the operation of a property, but whose salaries/wages are not included in
other specific expense categories.
Percentage Lease
Commonly used for large retail stores. Rent payments include a minimum or “base rent”
plus a percentage of the gross sales “overage”. Percentages generally vary from one to
six percent of the gross sales depending on the type of store and sales volume.
Percentage Rent
Rent, computed as a percentage of retail sales above a breakpoint, paid by tenants
under typical retail leases. Usually paid instead of or in addition to a specified minimum
base rent; commonly used for large retail stores. Rent payments include a minimum or
"base rent" plus a percentage of the gross sales "overage." Percentages generally vary
from 1% to 6% of the gross sales depending on the type of store and sales volume.
Overage rent is percentage rent paid over and above the guaranteed minimum rent or
base rent; calculated as a percentage of sales in excess of specified breakeven sales
volume.
Percentage Subsidized
Identifies the percentage of scheduled gross rental income that is subsidized.
Permanent Loan
A mortgage loan, usually covering development costs, interim loans, construction loans,
financing expenses, and marketing, administrative, legal, and other costs. This loan
differs from the construction loan in that financing goes into place after the project is
constructed and open for occupancy. It is a long-term obligation, generally for a period of
10 years or more.
Phase I
An assessment and report prepared by a professional environmental consultant which
reviews the property - both land and improvements - to ascertain the presence or
potential presence of environmental hazards at the property such as underground water
contamination, PCB’s, abandoned disposal of paints and other chemicals, asbestos and
a wide range of other potentially damaging materials. This Phase I Environmental Site
Assessment ("ESA") provides a review and makes a recommendation as to whether
further investigation is warranted (a Phase II Environmental Site Assessment). This latter
report would confirm or disavow the presence of an environmental hazard and, should
one be found, will recommend additional review and/or mitigation efforts that should be
undertaken.
Physical Property Inspection
Identifies whether the property has been physically inspected by the originator.
Playgrounds
Identifies the number of playgrounds located on the property.
Points
Points are a one time charge assessed at closing by the lender to increase the
lender's earnings on mortgage loans. One point equals 100 basis points, or 1% of the
loan. Referred to as a "par loan" if no points are charged by the lender.
Pooling and Servicing Agreement
A legal contract defining the responsibilities and the obligations for management of a
CMBS particularly for the Master Servicer and the Special Servicer. This primary
document governs and controls much of the CMBS process. Also abbreviated as PSA,
not to be confused with the Public Securities Association which is also known as PSA.
Pools
Identifies the number of swimming pools located on the property.
Power Shopping Center
Open shopping center of 100,000 - 325,000 square feet. Tenants: At least two (usually
more) anchor stores.
Preliminary Title Fee
A quoted or estimate fee to cover the cost of the title documents and services required by
the lender to obtain a mortgage.
Prepayment Lockout
The number of periods during which the borrower is restricted from prepaying the
mortgage loan; typically expressed in years or months. In order to reduce prepayment
risk, commercial mortgages commonly have lockout periods and/or prepayment
premiums or yield maintenance. A prepayment penalty is paid by the borrower for any
prepayments made on a mortgage loan if required under the loan documents. The
premium is usually set at a fixed rate which, at times, decrease in steps as the loan
matures. For example, a mortgage loan can have a premium of 5% for the first seven
years and during the next five years the premium decreases at a rate of 1% per year (4%
in year eight, 3% in year nine); after year twelve, there is no prepayment premium.
Prepayment Privilege
The privilege or right given by the mortgagee (lender) to the mortgagor (borrower) that
allows prepayment all or part of a mortgage debt before it is due.
Primary Guest Type (Hotel)
For hotels, identifies the primary type of guests. Options often include Business,
Government, Traveler, Business or Vacation, Business/Economy, Extended Stay, Other.
Prime Rate
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).
Private Pay (Healthcare)
Income from patient beds occupied by patients paying with cash or private insurance.
Processing Fee
A fee, charged by a lender, to prepare all the documents associated with your mortgage.
Professional Fees
An expense line item that includes all fees and expenses associated with legal,
accounting, data processing and auditing costs.
Professionally Managed
Identifies whether the property is managed by an unrelated professional management
company.
Property Class
A general classification of real property based on design, construction and finish. Options may include Class A, Class B, Class C and Class D.
Property Insurance
An expense line item that includes all fees relating to property and casualty and other
related insurance costs associated with the property.
Property Name
Identifies the property name that is displayed on the Property List; an easily recognizable
or descriptive name; typically a street address or property name (e.g. "100 Main Street"
or "Commerce Center Mall"). The default name is the Loan Name.
Property Subtype
Identifies the property or "building" subtype; sub-categorization that further describes the
building type.
Property Type
Indicates the general property type. Options may include Office, Multifamily,
Mobile Home Park, Retail, Industrial, Healthcare, Self Storage, Hotel and Mixed Use.
Proposed DSCR
Identifies the debt service coverage ratio that is being quoted on the requested loan.
Proposed LTV
Identifies the loan to value ratio that is being quoted on the requested loan.
Prorata Expense Reimbursement
Identifies that the cost of the associated item is allocated between the lessor and lessee
based on the lessee's proportionate share of net rental area (e.g. to prorate real property
taxes or insurance).
Public Sewer Service
Identifies whether the property is serviced with public sewer.
Public Water Service
Identifies whether the property is serviced with public water.
Purchase
An event resulting in the conveyance of real estate.
Purchase Price
If the Loan Purpose if Purchase, identifies the purchase price for the property.
Qualified Institutional Buyer
A QIB is defined within the meaning of Rule 144A under the Securities Act. A QIB must
have a minimum net worth, be involved in and knowledgeable of the risks of the
investment and investors for their own account or for the account of another QIB. Most
CMBS can only be sold to QIBs.
Qualified Mortgage
This includes any obligation (including any participation or certificate of beneficial
ownership interest therein) which is principally secured by an interest in real property and
which is either (I) transferred to the REMIC on the startup date, or (ii) purchased by the
REMIC within the three month period beginning as of the startup day (except as provided
in any regulations published) is pursuant to a fixed price contract in effect on the startup
day. Additional obligations qualifying as secured by real property for the purposes of
being termed a Qualified Mortgage include 1.) obligations secured by stock held by
tenants-stockholder in a cooperative housing corporation, 2.) debt securities backed by
mortgages on timeshare ownership interests in a condominium development, and 3.)
REMIC regular interest (not residual interest) transferred to the REMIC on the startup day
in exchange for any interest in the REMIC.
Qualified Reserve Asset
An intangible asset held for investment as part of a “qualified reserve fund” which is
defined in the Code as any reasonably required reserve to provide for full payment of
expenses of the REMIC or amounts due on regular interests in the event of defaults on
qualified mortgages or lower than expected returns on cash flow investments. The
creditworthiness of the qualified mortgages and the extent and nature of any guarantee
are factors to be considered in determining the reasonableness of the amount of reserve.
The reserve must be reduced timely as payments on the qualified mortgages are
received.
 
Rate Index
Identifies the index corresponding to the 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.
Real Estate Investment Trust
A business entity formed to invest in real estate, mortgages and/or securities backed by
real estate. REITs are required to pass through 95% of taxable income to their investors
and are not taxed at the corporate level. The three major types of REITs are equity,
mortgage and hybrid, with equity being the dominant type; referred to as REIT.
Real Estate Mortgage Investment Conduit
A vehicle, created by the Tax Reform Act of 1986, which permits the sale of interests in
mortgage loans in the secondary market. It is a pass-through entity that can hold loans
secured by real property and issue multiple classes or investors without the regulatory,
accounting and economic obstacles inherent with other forms of mortgage-backed
securities; referred to as REMIC.
Real Estate Owned
The term used to describe real property collateral to which title has been taken back by
the mortgagee (trust by way of beneficial ownership) through foreclosure or deed in lieu
of foreclosure.
Recourse
A type of mortgage loan in which the lender's remedies in the event of borrower default
are unlimited, extending beyond the property to the borrower's personal assets.
Recourse Options
Options that determine the type of mortgage loan in which the lender's remedies in the
event of borrower default are either limited or unlimited, and may extend beyond the
property to the borrower's personal assets. Options may include Recourse, Non-
Recourse, or Partial Recourse. Recourse - A type of mortgage loan in which the lender's
remedies in the event of borrower default are unlimited, extending beyond the property to
the borrower's personal assets. Non-Recourse - A mortgage in which the lender will not
pursue personal liability against the borrower. The lender's security is the real estate
being financed. Usually subject to standard carve outs including fraud and
misrepresentation. Partial Recourse - a combination of recourse and non-recourse
conditions.
Recreational Area
An area suited for games, dancing, or other kinds of recreation.
Recreational Property
A property designed for a very specialized use. Property types include sports arenas,
country clubs, marinas, etc.
Regional Shopping Center
Enclosed shopping center of 400,000 - 800,000 square feet. Tenants: At least two anchor
stores.
Reimbursement
(Reimbursement Structure) A payment or accounting structure in which the cost for
utilities and/or services incurred by the tenant is paid to the provider by the lessor and
subsequently reimbursed, usually on a prorata basis, by the tenant. Typically, the
associated item is allocated between the lessor and lessee based on the lessee's
proportionate share of net rental area (e.g. utilities, real property taxes, insurance).
Reimbursement Basis
Identifies the structure by which the tenant reimburses the landlord for expenses relating
to the leased area; options include NNN, Gross, or Modified Gross.
Renewal Probability
The probability that the tenant will renew or extend the lease term for one or more
prescribed periods, expressed as a percentage from 0% to 100%. For example, a 65%
renewal probability represents that the there is a 65% chance that the tenant will renew
the lease; resulting in a 35% rollover probability.
Rent Roll
This is a spread sheet describing the leases and occupancy of a building. It tells the tenant name, lease start date, lease date, # of units, square footage, amount of rent and how long each tenant has been there.
Rent Roll Start Date
Identifies the date from which Tenant Improvement and Leasing Commissions are
calculated. By default, this date is the date on which the loan file was created.
Rent Step-Up
A lease agreement in which the rent increases every period for a fixed amount of time or
for the life of the lease.
Repairs & Maintenance
A line item expense that represents all expenses for the general repairs and maintenance
of the building including common areas and general upkeep. Includes both in-house
payroll and contracted services. Repairs and maintenance expense includes payroll,
elevator, HVAC, electrical and plumbing, structural/roof, trash removal, and other repairs
and maintenance expense items. Repairs & Maintenance can be provided in total or
broken down by the following subcategories: 1. Payroll - The expense of all employees
involved in on-going property repairs and maintenance, but whose salaries/wages are not
included in other specific expense categories. 2. Elevator - The expense of the contract
and any additional expenses for elevator repairs and maintenance. This expense item
may also include escalator repairs and maintenance. 3. HVAC – The expense of the
contract and any additional expenses for heating, ventilation and air-conditioning
systems. 4. Electrical & Plumbing - The expense of all repairs and maintenance
associated with the property’s electrical and plumbing systems. 5. Structural/Roof - The
expense of all repairs and maintenance associated with the property’s building structure
and roof. 6. Trash Removal - The expense of garbage removal services. 7. Other Repairs
& Maintenance - The cost of any other repairs and maintenance items not specifically
included in other expense categories.
Replacement Reserves
A guideline provided by a Lender that suggests the minimum required replacement
reserves (or capital expenditures) for the proposed loan. A Lender bases this guideline
on numerous factors including property type, loan amount, proposed loan to value and
debt service coverage, and numerous physical, financial and tenancy factors identified in
the proposed loan. Replacement reservesare various account(s) maintained (typically by the Lender) to provide funds for anticipated expenditures required to maintain a building. A reserve account usually is
required by a lender in the form of an escrow to pay upcoming taxes and insurance costs.
A replacement reserve is usually an amount set aside from net operating income to pay
for the eventual wearing out of short–lived assets; monthly deposits that a lender may
require a borrower to a reserve in an account, along with principal and interest payments
for 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.).
Research & Development
An Industrial property subtype in which the property is occupied by one or more tenants
and the property is utilized for research & development purposes.
Reserve Funds
A portion of the bond proceeds that are retained to cover losses on the mortgage pool. A
form of credit enhancement. Also called reserve accounts. Residual refers to any cash
flow remaining after the liquidation (full pay off) of all classes of securities in. a CMBS.
Multiple-Asset, Multiple Class CMBS frequently have a residual.
Residual Interest
Every REMIC must have one and only one class of residual interests, although there may
be multiple owners of residual interests. All distributions of residual interests must be
prorated; however, a residual interest does not have to entitle the holder to any fixed or
minimum, distributions in order to qualify as such. Residual interests may accrue income
or cash flow in several ways including 1) the rate(s) differential between the underlying
mortgages and the REMIC regular interests, 2) income or cash flow resulting from overCopyright
2002 LendingApps, Inc.
collateralization, 3) buy down reserves, sinking funds or prepaid insurance, and 4)
income from qualified reserve funds or cash flow investments in excess of what is
required to service regular interests.
Resort Area (Hotel)
A place or geographical area (e.g. city, county, region) where tourism substantially
contributes to the local economy; a place frequented by people for relaxation or
recreation (e.g. beach resort, ski resort).
Restaurants
Identifies the number of restaurants on the property.
Retail
A general property type or building type classification characterized by its usage for retail
purposes. Subtypes may include Grocery Anchored Retail, Other Anchored
Retail, Free Standing Retail, Strip Center - Anchored, Strip Center - Unanchored, Mall -
Super Regional, Mall - Regional, Regional Center, Unanchored Retail, Single Tenant
Investment Grade, Single Tenant Non-Investment Grade, Outlet Center, Other.
Retail Property
Property types range from super regional shopping centers with a gross leasable area
greater than one million square feet to small stores with single tenants. See Shopping
Center.
Retail Surrounding land Use
Identifies the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. Retail uses include general retail uses including
Grocery Anchored Retail, Other Anchored Retail, Free Standing Retail, Strip Center -
Anchored, Strip Center - Unanchored, Mall - Super Regional, Mall - Regional, Regional
Center, Unanchored Retail, Single Tenant Investment.
Retail Tenant Type
Characterizes the tenant type based on usage of the leased area; Retail usage generally
includes most uses involving the sale of goods to consumers.
RevPAR
(Revenue per Available Room) is calculated by either (1) dividing net booked revenue by
total available room nights, or (2) multiplying occupancy by average daily rate. A macro
measurement to determine the amount of money a hotel earns for each room available.
Road Surfaces
Identifies the primary road surfaces on the collateral property. Examples
include All Paved, Mostly Paved, Some Paved, Dirt/Gravel or Other.
Rollover Probability
The probability that the tenant will not renew or extend the lease term at the time of lease
expiration, expressed as a percentage from 0% to 100%. For example, a 35% rollover
probability represents that the there is a 35% chance that the tenant will not renew the
lease; resulting in a 65% renewal probability.
Room Expense (Hotel)
An expense line item for hotel properties. The expenses related to room revenue,
equipment rental, and public meeting room revenue, including functional areas such as
the front office, reservations, housekeeping, laundry, uniform service, complimentary
breakfast and bar. This item includes salaries and wages, payroll taxes and benefits, and
other related expenses such as cable TV, china/glass/silver, cleaning supplies,
complimentary food & beverage, contract cleaning/labor/laundry, cost of food/beverage,
decorations, entertainment, equipment rental, glass/plastic supplies, guest
satisfaction/supplies/transportation, happy hour appetizers, in-room entertainment,
laundry allocation/supplies, linens, miscellaneous, office supplies, operating supplies,
over/(short), paper supplies, printed supplies, promotion, reservations assessment,
telephone admin., training materials, travel agent commissions, uniforms, VIP expense,
walk expense, etc.
Room Revenue (Hotel)
A revenue line item for hotel properties. The income related to room revenue, equipment
rental, and public meeting room revenue, including functional areas such as the front
office, reservations, housekeeping, laundry, uniform service, complimentary breakfast
and bar.
Rooms with Kitchen
In hotels, rooms with kitchens may include a refrigerator, stove/oven, dishwasher, etc.
SBA Financing
Financing provided or guaranteed in part by the Small Business Administration; usually
requires that the owner occupy at least 51% of the collateral property.
Security Gates
Identifies the number of security gates located on the property.
Self Storage
A general property type or building type classification characterized by its usage for self
storage purposes (also called Mini-Storage); provides personal storage for lease by
consumers.
Senior Housing
Identifies whether the property is occupied by senior citizens (age 55 or over).
Servicer
Institution acting for the benefit of the certificate holders in the administration and
servicing of mortgage loans in the CMBS. Functions include reporting to the Trustee,
collecting payments from borrowers, advancing funds for delinquent loans, negotiating
workouts or restructures (as permitted by the PSA), taking defaulted loans through the
foreclosure process, and liquidating defaulted loans and REO.
Sewage Adjacent
Identifies whether the property is located adjacent to a Sewage or Waste Treatment
Facility.
Similar Residential Surrounding Land Use
Identifies the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. Similar Residential includes residential dwellings
similar to the collateral property.
Similar Retail Surrounding land Use
Identifies the general land use of the surrounding and/or adjacent properties in
comparison to the collateral property. Similar Retail includes retail buildings similar to the
collateral property.
Single Tenant Investment Grade
A Retail property subtype in which the property is net leased to one investment grade
tenant (BBB- rating or higher) and the property is utilized for retail purposes.
Single Tenant Non-Investment Grade
A Retail property subtype in which the property is net leased to one non-investment
grade tenant (BBB- rating or lower) and the property is utilized for retail purposes.
Some Paved - Road Surfaces
Identifies some of the road surfaces as being paved with macadam, concrete, cement or
other similar surfacing.
Special Purpose Corporation
A bankruptcy-remote entity established by the borrower whose sole asset is the property
of properties being financed. The SPC protects the lender from having the underlying
property(ies) become involved in bankruptcy proceedings against other assets of the
borrower of the property. Also known as SPE (Special Purpose Entity) with other than
corporate owners.
Specialty Center
A Retail property subtype in which the property is occupied by the power center group
(e.g. Sports Authority, Levitz Furniture to other "category killer" stores).
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. Expressed as a
percentage.
Standard & Poor’s
Standard & Poor’s Rating Service is one of the four primary rating agencies and is a
division of McGraw-Hill Companies, Inc.; referred to as S&P.
Strip Center - Anchored
A Retail property subtype in which the property is occupied by one or more anchor
tenants and the main thoroughfares are bordered by an almost continuous row or strip of
retail stores and allied service establishments; any shopping area that consists of a row
of stores. An anchor tenant is a well-known commercial retail business such as a national
chain store or regional department store strategically placed in a shopping center so as to
generate the most amount of customers for all of the stores located in the shopping
center; typical gross building area ranges from 50,000 to 100,000 square feet.
Strip Center - Unanchored
A Retail property subtype in which the property is occupied by multiple tenants of which
none are anchor tenants, and the main thoroughfares are bordered by an almost
continuous row or strip of retail stores and allied service establishments; any shopping
area that consists of a row of stores. An anchor tenant is a well-known commercial retail
business such as a national chain store or regional department store strategically placed
in a shopping center so as to generate the most amount of customers for all of the stores
located in the shopping center; typical gross building area ranges from 50,000 to 100,000
square feet.
Structure
Refers to the tax and legal structure of a CMBS such as a pass-through structure, a bond
structure, a Collateralized Mortgage Obligation (CMO) or a Real Estate Mortgage
Investment Conduit (REMIC). The “structure” can determine the tax benefits, or penalties,
and the rights of the CMBS holders and the issuer in the event of a failure or default
within the terms of the security. Most CMBS are senior/subordinated, multiple class pass throughs
classified as REMICs.
Student Housing
A Multifamily subtype; a multifamily or multi-unit dwelling primarily occupied by students
(e.g. college students).
Student Housing
Identifies whether the property is occupied by students. In commercial underwriting,
properties that are occupied by students may experience seasonal variations of vacancy
and rental income.
Subject-To Conditions
Identifies the conditions or stipulations under which a loan may be assumed.
Subordinated Ground Lease
A lease in which rights of the lessor of the ground are junior to the rights of the holder of
the first mortgage.
Suburban Garden Office
An Office subtype characterized by a garden-like setting and its location in a town or
unincorporated developed area in a close proximity to a city. Suburbs, largely residential,
are often dependent on the city for employment and support services; generally
characterized by low-density development relative to the city; usually one to three story
structures in a suburban or rural-urban fringe development.
Suburban High Rise
An Office subtype characterized typically by a high number of stories that requires an
elevator and its locations in a town or unincorporated developed area in a close proximity
to a city. Suburbs, largely residential, are often dependent on the city for employment and
support services; generally characterized by low-density development relative to the city;
usually a four-story or higher structure in a suburban or rural-urban fringe development.
Suite #
Identifies the suite number or other identifying name or reference to the tenant.
Super-Regional Shopping Center
Enclosed shopping center of More than 800,000 square feet. Tenants: At least three
anchor stores.
Superadequate - Ease of Ingress/Egress
Refers to an excellent degree of capacity to enter and exit a property. Super adequacy
refers to a greater capacity or quality than a prudent purchaser or owner would include or
would pay for under current similar market conditions.
Superadequate - Exterior Lighting
Refers to an excellent quality and amount of exterior building lighting or yard lighting.
Copyright 2002 LendingApps, Inc.
Superadequate Truck Turnaround
Refers to an excellent 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
odd-sized parcel of land may be appropriate for an office but may provide limited
functionality for industrial loading and delivery. Super adequacy refers to a greater
capacity or quality than a prudent purchaser or owner would include or would pay for
under current similar market conditions.
Surrounding Land Use
Identifies the surrounding land use in comparison to the collateral property.
T-111 Exterior
Textured plywood siding; an inexpensive exterior wall surface both commercial and
residential structures.
Telephone Expense (Hotel)
An expense line item for hotel properties. The expenses related to local and long
distance phone service, and other telecommunications services, including telephone cost
of sales, salaries and wages, payroll taxes and benefits, and other related expenses such
as contract labor, equipment rental, laundry allocation, miscellaneous, office supplies,
operating supplies, telephone admin., training materials, uniforms, etc.
Telephone Revenue (Hotel)
A revenue line item for hotel properties. The income related to local and long distance
phone service, and other telecommunications services.
Tenant Improvement Costs-New
The expense to physically improve the property to attract new tenants to new or vacated
space which may include new improvements or remodeling. May be paid by tenant,
landlord, or both. Typically, tenants are provided with a market rate TI allowance ($/sq.
ft.) that the owner will contribute towards improvements. The tenant must pay for
amounts above the TI allowance desired by the tenant.
Tenant Improvement Costs-Renewal
A fee paid by the property owner or the tenant to a real estate broker or leasing agent for
services rendered; typically paid by a property owner at the time of a lease renewal.
Usually calculated as a percentage (1% to 6%) of the entire lease payments, paid in
increments during the lease term.
Tenant Improvements
Improvements or renovations made to the property to attract new tenants to new or
vacated space which may include new improvements or remodeling. May be paid by
tenant, landlord or both. Typically, tenants are provided with a market rate TI allowance
($/sq. ft.) that the owner will contribute towards improvements. Amounts above the TI
allowance that the tenant wants must be paid for by the tenant.
Tenant Improvements
The expense to physically improve the property to attract new tenants to new or vacated
space which may include new improvements or remodeling. May be paid by tenant,
landlord, or both. Typically, tenants are provided with a market rate TI allowance ($/sq.
ft.) that the owner will contribute towards improvements. The tenant must pay for
amounts above the TI allowance desired by the tenant.
Tenant Name
Identifies the name of the tenant; and editable field. If entering vacant space, identify the
unit and select the "Check if Vacant" option.
Tennis Courts
Identifies the number of tennis courts located on the property.
Terminal LTV
The ratio of the proposed loan amount to the value of an investment at the end of a
period (usually the conclusion of the loan term) taking into account a specified rate of
interest; provides an indication of refinance risk.
TI Costs - New
The expense to physically improve the property to attract new tenants to new or vacated
space which may include new improvements or remodeling. May be paid by tenant,
landlord, or both. Typically, tenants are provided with a market rate TI allowance ($/sq.
ft.) that the owner will contribute towards improvements. The tenant must pay for
amounts above the TI allowance desired by the tenant.
TI Costs - Renewal
The expense to physically improve the property to attract existing tenants to renew or
extend the lease term for one or more periods, which may include new improvements or
remodeling. May be paid by tenant, landlord, or both. Typically, tenants are provided with
a market rate TI allowance ($/sq. ft.) that the owner will contribute towards improvements.
The tenant must pay for amounts above the TI allowance desired by the tenant.
TI/LC
A guideline provided by Lenders that suggests the minimum required reserves for
tenant improvement and leasing commission replacement reserves (TILC) for the
proposed loan. A Lender bases this guideline on numerous factors including property
type, loan amount, proposed loan to value and debt service coverage, and numerous
physical, financial and tenancy factors identified in the proposed loan.. Tenant Improvements refers to the expense to physically improve the property to attract new tenants to new or vacated space which may include
new improvements or remodeling. May be paid by tenant, lessor, or both. Typically,
tenants are provided with a market rate TI allowance ($/sq. ft.) that the owner will
contribute towards improvements. The tenant must pay for amounts above the TI
allowance desired by the tenant. A Leasing Commission is an amount, usually a
percentage of the total lease transaction, earned by a real estate broker or leasing agent
for his services. Combined, the annual projected cost of tenant improvements and
leasing commissions (TILC's) are deducted from the net operating income prior to
determining the net cash flow available for debt service coverage.
TI/LC Stress DSCR
The ratio of net operating income over the annual mortgage payment, where the
calculated net cash flow includes reserves for the projected costs of tenant improvements
and leasing commissions (TI/LC costs). This threshold is utilized to analyze projected
annual cash flow deficiencies resulting from TI & LC expenditures over the loan term.
Generally, a minimum threshold margin of 1.10x is desired. Lenders use this ratio to
assist them in determining the likelihood of a negative cash flow event as a result of TI &
LC costs during the term of the loan. See also TI/LC..
Total Capital Items
The total of all capital expense items relating to the property; line item expenses on a
profit and loss statement that would not be expensed on an annual basis. This category
would include replacement of major building systems, such as roofs, etc.
Total General Expenses (Hotel)
The total of all general expenses including real estate taxes, property insurance, utilities,
repairs and maintenance, franchise fees, management fees, payroll and benefits,
advertising and marketing, professional fees, general and administrative, ground rent and
other general expenses.
Total Land Area
Identifies the total land area of the property; expressed in acres. One acre equals 43,560
square feet.
Total No. of Rooms (Hotel)
The total number of available guest rooms in a hotel or hospitality.
Total Operating Expenses
The calculated total for all operating expenses.
Townhouse style
A Multifamily subtype; a one-, two- or three-story apartment dwelling; typically a row
house on a small lot which has exterior limits common to other similar units. Title to the
unit and its lot is vested in the individual buyer with a fractional interest in common areas,
if any.
Traffic
Identifies the overall traffic flow at the property. Generally, traffic volume may be
advantageous or disadvantageous to a property, depending on other conditions that
affect its highest and best use. High-volume local traffic in commercial areas is usually an
asset; heavy through traffic is deleterious to most retail stores, except those that serve
travelers; high volume commercial traffic may have a negative impact on residential
properties. The volume of traffic is typically determined by a traffic count, which is usually
obtained from local or state transportation departments.
Trailing 12 Months
Information from only the 12 months preceding the month of the analysis.
Tranche
A term applied to describe classes of CMBS securities, i.e., "AAA" Tranche”.
Traveler Primary Guest Types
Identifies that the hotel rooms are predominately occupied by guests traveling along a
route towards a destination (usually one-night stays).
Truck Turn around Adequacy
Determines the adequacy of truck and tractor trailer maneuverability; important when
analyzing industrial buildings and other building types that require delivery and loading of
product.
Trust
A borrowing entity structured wherein a fiduciary relationship whereby legal title to a
property is transferred to a trustee with the intention that such property be administered
by the trustee for the benefit of another, the beneficiary, who holds equitable title to such
property.
Unanchored Retail
A Retail property subtype in which the property is occupied by multiple tenants of which
none are anchor tenants and the property is utilized for general retail purposes. An
anchor tenant is a well-known commercial retail business such as a national chain store
or regional department store strategically placed in a shopping center so as to generate
the most amount of customers for all of the stores located in the shopping center.
Uncovered Parking Spaces
Parking spaces without a roof or other structure designated to the specific property
and/or building.
Unit Density
Identifies the physical unit density on the collateral property. Unit density is
the ratio of pads per acre; options include < 10 pads, 10 pads, or > 10 pads.
Unlicensed Beds (Building)
A nursing home or similar facility that provides health care services unlicensed by the
state in which the facility is located.
Unsubordinated Ground Lease
A lease in which rights of the lessor of the ground are senior to the rights of the holder of
the first mortgage.
Utilities
The total of all utility expenses relating to the property; typically includes gas, electricity,
oil, etc.
Vacancy & Collection Loss
A guideline provided by Lenders that suggests the minimum required vacancy and
collection loss reserve for the proposed loan. A Lender bases this guideline on
numerous factors including property type, loan amount, proposed loan to value and debt
service coverage, and numerous physical, financial and tenancy factors identified in the
proposed loan. Vacancy and Collection Loss is the percentage of all units or space that is unoccupied, not rented or from which there is no rental income. On a normalized or pro-forma income statement a projected vacancy rate is used to estimate the vacancy allowance (both physical and economic), which is
deducted from potential gross income to derive effective gross income; also, an
estimated amount reflecting probable vacancy, non-payment of rent by tenants, and any
other income loss. These funds are set aside to cover either expected or unanticipated
income losses.
Vacant Space
Identifies whether the leased area is vacant.
Validate
Enables the validation module when the open loan file is committed; the validation
module checks the status of all mandatory fields to assess the completeness of the loan
file for submission to the matching engine; also "Validate on Save".
Value of Last Appraisal
The concluded estimated market value from the last appraisal completed on the collateral
property.
Variable Rate
A mortgage with an interest rate that changes periodically, according to an index that is
selected when the mortgage is issued. The initial interest rate is lower than that of fixed rate
mortgages, but monthly payments can increase or decrease as the rate is adjusted.
Warehouse Multi-Tenant
An Industrial property subtype in which the property is occupied by two or more tenants
and the property is utilized for warehouse purposes.
Warehouse Single-Tenant
An Industrial property subtype in which the property is occupied by one tenant and the
property is utilized for warehouse purposes.
Warehouse Tenant Type
Characterizes the tenant type based on usage of the leased area; Industrial usage
generally includes most non-manufacturing uses, such as warehouse.
Wood General Building Exterior
Identifies the general property exterior to be constructed of wood (possibly with minimal
brick or stone veneer).
Year Constructed
The year(s) in which the collateral property received any significant renovations or capital
expenditures.
Year Renovated
The year(s) in which the collateral property received any significant renovations or capital
expenditures.
Atlantic Mortgage & Finance Corporation
236A Sand Hill Cove Rd, Narragansett, RI  02882
Office:  (401) 481-8050
Fax:  (888) 719-6213
info@atlanticcorporation.net
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