Commercial Real Estate
Commercial Real Estate
Commercial Real Estate
GLOSSARY OF TERMS  

GLOSSARY OF TERMS - F

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FASHION/SPECIALITY CENTERS:

This type of retail center is composed mainly of upscale apparel shops, boutiques, and craft shops carrying selected fashion or unique merchandise of high quality and price. These centers need not be anchored, although sometimes restaurants or entertainment can provide the draw of anchors.


FEE SIMPLE INTEREST:

Maximum real property interest one can hold. 100% ownership of bundle of rights held in real property. See Bundle of Rights.


FINANCIAL LEVERAGE:

The use of borrowed funds to acquire an investment.


FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA):

Is the largest non-governmental regulator for securities firms doing business in the United States. FINRA is funded by its broker dealer members.


FINANCIAL RISK:

The possible change in an investment's ability to return principal and income.


FIRST-LOSS POSITION:

The position in a security that will suffer the first economic loss if the underlying asset(s) lose value or are foreclosed on. The first-loss position carries a higher risk and thus a higher yield.


FIXTURE:

Item of personal property that has been converted to real property by being permanently affixed to the realty.


FLAGGED HOTEL:

Hotel that belongs to a nationwide franchise, such as a Hilton or a Holiday Inn. Flagged (franchised) hotels have the advantage of a national reservation system, a uniform standard of appearance, cleanliness, layout, room sizes, group buying power, national advertising. There are also more lenders willing to finance a flagged hotel than an independent or non flagged property. Franchises typically cost between 8% to 10% of room rents.


FLEX-TYPE BUILDING:

Generally single-story, versatile buildings found in research & development areas/parks or within industrial/distribution settings. Varying blends of both office and warehouse/distribution spaces are found within flex buildings.


FLOOR AREA RATIO (FAR):

Also know as a Floor Space Index (FSI) is the ratio of the total floor area of buildings to the size of the land of that location, or the limit imposed on such a ratio.


FUNCTIONAL OBSOLESCENCE:

1. Curable: out moded or unacceptable physical or design features that are no longer considered desirable by purchasers. 2. Incurable: not easy to remediate. Cost of cure would be greater than resulting increase in value.




This Glossary of Commercial Real Estate Terms is provided for general understanding purposes. Readers should consult with their legal and/or accounting professionals for specific situations and questions. TM 1031 Exchange Inc. and its employees provide neither legal nor accounting services or advice.