-1-
-2-
participants, employee turnover, salary
scale, and inflation.
Ad Valorem Tax From the Latin,
meaning "according to value." In the
United States, local property taxes are Ad
Valorem taxes, being assessed in accord
with property value.
Additional Rent Because the law in most
states provides landlords with a legal
mechanism for collecting rent which is
easier to apply than civil actions to collect
other debts, commercial leases explicitly
deem all financial obligations of the tenant
to the landlord to be Additional Rent so
that they may be collected as rent.
Additional Rent may include such items as
retail percentage rent, expense pass-
throughs, escalations, charges to amortize
above standard tenant improvements,
interest on past due amounts, late fees, and
penalties.
Add-On Factor In a multi tenant
building, a factor, expressed as a per cent,
by which the net usable square foot area
within a demised tenant suite is increased
to allocate common areas such as lobbies,
corridors and rest rooms. Rental rates are
then applied to the resulting gross area.
Also called Load Factor.
Adjusted Funds Available for
Distribution (AFFO) A measure of REIT
performance used by many analysts with
concerns about quality of earnings as
measured by FFO. Calculated differently
by different analysts, and sometimes called
cash available for distribution (CAD) or
funds available for distribution (FAD). The
most common adjustment to FFO is an
estimate of certain recurring capital
expenditures needed to keep the property
portfolio competitive in its marketplace.
For this reason, some analysts also
consider AFFO a measure of a REIT's
ability to pay its shareholder dividend
distribution.
Adjusted Fund From Operation (AFFO)
See Funds Available for Distribution
(FAD).
Adjusted Net operating Income Total
income less operating expenses less
interest expense on debt. Ground lease
payments may also be deducted if the
remaining lease term is of long enough
duration to justify such treatment as an
expense. Principal repayments of debt are
considered capital expenditures and are not
included in the computation of Adjusted
Net Operating Income.
Administrative Fee Also referred to as an
annual fee, asset charge, trust,
administration fee, account charge, or
custodial fee. Usually stated as a
percentage of assets under management or
as a fixed annual dollar amount.
Advances Payments made by the servicer
when the borrower fails to make a
payment.
Advisor A broker, consultant or
investment banker who represents an
owner in a transaction. Advisors may be
paid a retainer and/or a performance fee
paid at the close of a financing or sales
transaction.
Advisory Account A separate, non-
commingled account established for a
specific client. Also called separate
account, individually managed account, or
direct investment account. See:
Commingled Account; Discretionary
Account; Non Discretionary Account.
After Tax Yield For taxable investors,
the yields, expressed as an annual percent,
computed by dividing the Net After Tax
Cash Flow by the total Equity Investment
in a property. The After Tax Yield is
computed for a specific period such as the
