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Multifamily Real Estate Glossary

Multifamily Real Estate Glossary

What is an Estoppel Certificate?

An estoppel certificate is a document in real estate where a tenant or borrower confirms the current status and terms of their lease or mortgage, preventing future disputes over the agreement's terms.

January 6, 2024

What are leasehold improvements?

Leasehold improvements are tenant-initiated modifications to a rented space, often including structural and utility upgrades, whose costs and ownership terms are defined in the lease agreement and typically revert to the landlord at the lease's end.

January 6, 2024

What is a BPO and how is it used in commercial real estate?

A Blanket Purchase Order (BPO) is a long-term agreement for recurring services or supplies. They help streamline procurement and facilitate more effective cost management and budgeting.

January 6, 2024

What is T&E in real estate?

T&E refers to regulated business expenses for travel and client entertainment, including airfare, hotels, meals, and event tickets.

January 6, 2024

What is ROU and how does it apply to real estate?

In commercial real estate, the Right-of-Use (ROU) asset model requires lessees to recognize leased properties as assets on their balance sheets, reflecting their right to use the property and corresponding lease liabilities.

January 6, 2024

What is a BOV in commercial real estate?

A BOV (Broker Opinion of Value) in commercial real estate is a document prepared by a broker offering an estimated value of a property, based on market analysis and comparisons, but less formal than a licensed appraisal.

January 6, 2024

What is absorption rate in real estate?

The absorption rate in real estate, calculated by dividing the number of homes sold by the number of available homes in a given period, helps measure the balance between supply and demand in a market.

January 6, 2024

How are LTV and DSCR used in Real Estate Finance?

Loan-to-Value (LTV) is used to assess loan risk based on property value, while Debt Service Coverage Ratio (DSCR) evaluates a property's ability to generate income to cover debt, both critical in determining loan approval, structuring, and investment viability.

January 4, 2024

What is DSCR in Real Estate?

The Debt Service Coverage Ratio (DSCR) is a financial metric in real estate that assesses a property's ability to generate sufficient income to cover its debt, calculated by dividing its Net Operating Income by its total debt service.

January 4, 2024

What is LTV in Real Estate?

The Loan-to-Value (LTV) ratio in real estate, calculated as the loan amount divided by the property's value, is a key metric used by lenders to assess mortgage risk and determine borrowing terms.

January 4, 2024
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