A term whereby the owner of a property sells that property and then leases it back from the buyer. Beneficial to the Seller and Buyer, the Seller receives a lump sum of cash quickly and is allowed to retain possession and use of the property; the Buyer gets a lower than market value purchase price as well as a long-term lease.
A deposit made by a Tenant, in the form of cash, Letter of Credit or both, to secure the Tenant's performance of its monetary obligations under a Lease and to offset damages due to Tenant's negligence.
Example: As a condition to leasing space, ABC Company is required to provide a cash security deposit equal to two months rent. The Landlord retains the right to apply this deposit against any past due rent amounts, at which time ABC must replenish the deposit to its original amount or be in default under the lease.
Sensitivity AnalysisAn investment technique that assesses the risk of an investment, by calculating outcomes via changes in the assumptions.
Example: It was found that forecasting a 10% vacancy rate on an investment produced a rate of return of 14% versus an 18% rate of return for a 5% vacancy factor.
The income expected to be reached upon completion of construction or a major renovation.
Example: Stabilized income was expected to be reached five years after the completion of a shopping center.
The long-term occupancy expected to be reached upon completion of construction or a major renovation, assuming rental achievements at market level.
A property's value after it reaches normal occupancy and rental rates.
A rental lease that allows the Tenant full rights to the costs, risks and obligations of the property. The company therefore controls the property without being required to show the real estate as an asset on the financial statements.