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Our glossary of industry terms is one of the most visited sections of our site. We work continually to keep it current and are always adding new terms. In addition, if you ever can't find an industry word you are looking for, let us know. We'll research it and add it for you.

  • Balloon risk

    The risk that a borrower will not be able to make a balloon (lump sum) payment at maturity due to a lack of funding.

  • Balloon, or bullet, loan

    A loan with a maturity that is shorter than the amortization period.

  • Bankrupt

    The state of an entity that is unable to repay its debts as they become due.

  • Bankruptcy

    Proceedings under federal statutes to relieve a debtor who is unable or unwilling to pay its debts. After addressing certain priorities and exemptions, the bankrupt entity's property and other assets are distributed by the court to creditors as full satisfaction for the debt.

  • Base principal balance

    The original mortgage amount adjusted for subsequent fundings and principal payments without regard to accrued interest or other unpaid debt.

  • Base rent

    A set amount used as a minimum rent with provisions for increasing the rent over the term of the lease.

  • Base year

    Actual taxes and operating expenses for a specified year, most often the year in which a lease commences.

  • Basis point

    1/100 of 1 percent.

  • Below-grade

    Any structure or portion of a structure located underground or below the surface grade of the surrounding land.

  • Beneficiary

    An employee covered by an employee benefit plan.

  • Beta

    Also referred to as "the Beta coefficient," Beta is a statistical term used by money managers operating in the tradable equities securities market. Essentially, Beta is a measure of the volatility, or systematic risk, of a particular security or a portfolio in comparison to the market as a whole. Beta typically is used as a component of the capital asset pricing model (CAPM), which calculates the expected return of an asset based on its beta and expected market returns. Beta is calculated using regression analysis in an attempt to quantify the tendency of a security's returns to respond to swings in the market. A beta of 1 indicates that the security's price will move in lock step with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market. Utilities stocks typically have a beta of less than 1. Conversely, the majority of high-tech, typically Nasdaq-based stocks have a beta of greater than 1. Stocks with a beat of greater than 1 are believed to offer the possibility of a higher rate of return, but also require the investor to assume higher risk.

  • Bid

    An offer, stated as a price or spread, to buy whole loans or securities.

  • Blind pool

    A commingled fund accepting investor capital without prior specification of property assets.

  • Book value

    Also referred to as common shareholder's equity, this is the total shareholder's equity as of the most recent quarterly balance sheet minus preferred stock and redeemable preferred stock.

  • Broker

    A person who acts as an intermediary between two or more parties in connection with a transaction.

  • Build-out

    Space improvements put in place per the tenant's specifications. Takes into consideration the amount of tenant finish allowance provided for in the lease agreement.

  • Build-to-suit

    A method of leasing property whereby the developer/landlord builds to a tenant's specifications.

  • Buildable acres

    The area of land that is available to be built on after subtracting for roads, setbacks, anticipated open spaces and areas unsuitable for construction.

  • Building code

    The various laws set forth by the ruling municipality as to the end use of a certain piece of property. They dictate the criteria for design, materials and types of improvements allowed.

  • Building standard plus allowance

    The landlord lists, in detail, the building standard materials and costs necessary to make the premises suitable for occupancy. A negotiated allowance is then provided for the tenant to customize or upgrade materials.