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Real Estate Development and Reuse - CEcD Study Guide 2023
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Real Estate Development and Reuse - CEcD Study Guide 2023 Abandonment of Property - ANSWER According to the Mortgage Bankers Association of American, this term is defined as a property status indicating that (1) the property has been surrendered and is not being maintained, and (2) the property is not offered for sale or rent with a broker. Absorption - ANSWER Absorption is the rate at which space is leased or sold. Adaptive Reuse - ANSWER A process of converting a structure constructed for one purpose (e.g., a warehouse, manufacturing facility) to a different use (e.g. restaurant, marketplace). Agriculture Zoning - ANSWER Zoning that protects agricultural land from development, by restricting the lot size, formulating design criteria, etc. Air Rights - ANSWER The right to ownership of space above and/ or below the physical surface of a parcel of land. Anchor Tenants - ANSWER The largest tenants in a shopping center, an office building, industrial park, etc. The strength of the anchor tenants affects the availability of financing. Appraisal - ANSWER An opinion of the monetary value of a specific property, as of a specific date, supported by relevant and factual data. Appreciation - ANSWER An increase in value; the opposite of depreciation. Assessed Value - ANSWER The value assigned to real or personal property by the local government for property tax purposes. This value is usually less than the market value of the property. The relationship between assessed and market value of a property varies widely depending on the location and the jurisdiction. State statutes generally specify which assessment method is allowable in a particular state. Asset Management - ANSWER Includes ongoing, big picture property management activities such as capital improvements, refinancing, and the sale of property. Basis - ANSWER The dollar amount that the Internal Revenue Service attributes to an asset. It is used for a variety of tax purposes, including determining annual depreciation and the gain or loss on the sale of a property. It is derived by adding the cost of acquiring a property to the value of any capital improvements, minus any depreciation on that property. Big Box - ANSWER A large-format store, typically one that has a plain, box-like exterior. Big box stores are typically standalone or in power centers, locate near highway interchanges or exits, and are supported by vast surface parking areas. Brownfields - ANSWER Real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant. Build-to-Suit Development - ANSWER Development in which, a business retains a contractor or developer to build a customized structure. Typically the business secures long-term financing and owns and manages the building. The needs of the end-user guide the design of the facility as opposed to anticipated real estate market needs. Building Efficiency - ANSWER The ratio between net square feet (or gross leasable area) and gross square feet. Capitalization/Cap Rate - ANSWER A rate of return used to calculate the value of a property based on the relationship between income and sale prices of comparable properties. For the comparable properties, it is the first stabilized year net operating income (NOI) divided by a property's market value or sales price. Category Killers - ANSWER Stores that offer tremendous selection in a particular merchandise category at low prices. Cash Flows - ANSWER The amount of income remaining after expenses and other obligations have been paid. Depreciation and other non-cash charges are not counted in cash flows. It represents internally generated long-term funds available to a company or developer. Class A Office Space - ANSWER Most prestigious buildings competing for premier office users with rents above average for the area. Buildings hav e high-quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence. Class B Office Space - ANSWER Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price. Class C Office Space - ANSWER Buildings competing for tenants requiring functional space at rents below the average for the area. Closing Costs - ANSWER Various expenses and fees charged to both the buyer and the seller of real estate at the time of the property transfer. Costs can include brokerage commissions, lender discount points, deed recording fees, inspection and appraisal fees, and attorney fees. Collateral - ANSWER Real or personal property pledged by a borrower to protect a lender against default. In real estate lending, collateral usually refers to the property pledged or mortgaged by a borrower to a lender to secure the loan. Common Area Maintenance (CAM) - ANSWER Charges that office, retail, and warehouse tenants and condominium owners often pay, on a proportionate basis, to collectively reimburse the landlord for certain agreed upon expenses that relate to such items as maintenance, servicing of common areas, management, and in case of retail centers, advertising, and promotion. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) - ANSWER A 1980 federal act that has several objectives: 1) to provide a means of identifying and ranking hazardous waste sites, 2) to create a source of funds to finance site clean up, and 3) to establish liability for both damage caused and cleanup among site owners, businesses generating the waste, waste haulers, and waste disposal operations. See also Superfund. Comprehensive Plan - ANSWER A plan that describes the desirable ways in which a community should develop over a 10 to 20 year period. It includes a set of written development goals and policies, supplemented by maps. It may be advisory or legally binding depending on state enabling statutes. Condemnation - ANSWER A legal process that permits a city to acquire title to property for a public purpose, including the elimination of blight, for just compensation. It is sometimes used for economic development for job creation purposes without designation of blight. This process is also used for assuming property for the construction of a roadway, sewer line, etc. Construction Loan - ANSWER A short-term loan that enables a developer toThe benefits of buying summaries with Stuvia:
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