Glossary

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

A quantitative measure of the volatility of a given stock, mutual fund, or portfolio, relative to the overall market, usually the S&P 500. Specifically, the performance the stock, fund or portfolio has experienced in the last 5 years as the S&P moved 1% up or down. A beta above 1 is more volatile than the overall market, while a beta below 1 is less volatile.

Bid

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

Black Hat SEO

Search engines set up guidelines that help them extract billions of dollars of ad revenue from the work of publishers and the attention of searchers. Within that highly profitable framework search engines consider certain marketing techniques deceptive in nature, and label them as black hat SEO. Those which are considered within their guidelines are called white hat SEO techniques. The search guidelines are not a static set of rules, and things that may be considered legitimate one day may be considered deceptive the next.

Blind pool

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

Blogroll

Link list on a blog, usually linking to other blogs owned by the same company or friends of that blogger.

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.