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Glossary of Real Estate Terms
This Glossary has
been provided as a courtesy to assist you in
gathering information relative to real estate.
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Face Rental Rate:
The “asking” rental rate published by the
landlord. |
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Fair Market Value: The sale price at
which a property would change hands between a
willing buyer and willing seller, neither being
under any compulsion to buy or sell and both
having reasonable knowledge of the relevant
facts. Also known as FMV. |
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Federal National Mortgage Association (FNMA):
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. |
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Fee Simple:
An estate under which the owner is entitled to
unrestricted powers to dispose of the property,
and which can be left by will or inherited.
Commonly, a synonym for ownership. |
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Finance Charge: The amount paid for the
privilege deferring payment of goods or services
purchased, including any charges payable by the
purchaser as a condition of the loan. |
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First Generation Space: Generally refers
to new space that is currently available for
lease and has never before been occupied by a
tenant. |
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First Mortgage: The senior mortgage
which, by reason of its position, has priority
over all junior encumbrances. The holder of the
first or senior mortgage has a priority right to
payment in the event of default. |
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First Refusal Right or Right Of First Refusal
(Purchase): A lease clause giving a tenant
the first opportunity to buy a property at the
same price and on the same terms and conditions
as those contained in a third party offer that
the owner has expressed a willingness to accept. |
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First Refusal Right or Right Of First Refusal
(Adjacent Space): A lease clause giving a
tenant the first opportunity to lease additional
space that might become available in a property
at the same price and on the same terms and
conditions as those contained in a third party
offer that the owner has expressed a willingness
to accept. This right is often restricted to
specific areas of the building such as adjacent
suites or other suites on the same floor. |
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Fixed Expenses:
Expenditures such as property taxes, license
fees, and property insurance that are not
directly affected, by the occupancy of the
property. Fixed expenses along with operating
expenses are subtracted from effective gross
income to determine the net operating income of
property. |
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Flex Space: A building providing its
occupants the flexibility of utilizing the
space. Usually provides a configuration allowing
a flexible amount of office or showroom space in
combination with manufacturing, laboratory,
warehouse distribution, etc. Typically also
provides the flexibility to relocate overhead
doors. Generally constructed with little or no
common areas, load-bearing floors, loading dock
facilities and high ceilings. |
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Floor Area Ratio (FAR): The ratio of the
gross square footage of a building to the land
on which it is situated. Calculated by dividing
the total square footage in the building by the
square footage of land area. |
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Force Majeure: A force that cannot be
controlled by the parties to a contract and
prevents said parties from complying with the
provisions of the contract. This includes acts
of God such as a flood or a hurricane or, acts
of man such as a strike, fire or war. |
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Forward
Commitment: An agreement between a permanent
lender and an interim (typically construction)
lender wherein the permanent lender issues a
conditional commitment that will replace the
construction loan once a given set of terms and
conditions have been achieved. |
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Foreclosure: A procedure by which the
mortgagee (“lender”) either takes title to or
forces the sale of the mortgagor’s (“borrower”)
property in satisfaction of a debt. |
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Full Recourse: A loan on which an
endorser or guarantor is liable in the event of
default by the borrower. |
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Full Service Rent: An all-inclusive
rental rate that includes operating expenses and
real estate taxes for the first year. The tenant
is generally still responsible for any increase
in operating expenses over the base year amount. |
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Fully Amortized Mortgage (Loan): A loan
that is fully repaid at maturity by periodic
(monthly) reductions of the principal. The first
part of each monthly payment covers interest on
the outstanding debt as of the payment due date
and the remainder of the payment goes to reduce
the outstanding debt. |
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Future Proposed Space: Space in a
proposed commercial development which is not yet
under construction or where no construction
start date has been set. Future Proposed
projects include all those projects waiting for
a lead tenant, financing, zoning, approvals or
any other event necessary to begin construction.
Also may refer to the future phases of a
multi-phase project not yet built. |
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