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first full year of ownership or the
anticipated holding period.
Agent One who is authorized to act on
behalf of another. In an agency
relationship, the agent is empowered to
execute contracts on behalf of the principal,
which are binding upon the principal. The
agent also has certain fiduciary
responsibilities to the principal. A
brokerage agreement may or may not
establish the broker as an agent of the
property owner.
Aggregate Rent The arithmetic sum of
all base rent payments, but not expense
pass-throughs or escalations, to be paid by
the tenant over the entire term of the lease.
Aggregation Risk Risk associated with
warehousing mortgages during pooling
process for future securitization.
Mortgage holder faces risk of value of
loans declining due to adverse interest rate
movements and/or credit losses before
securitization can be arranged.
Aggressive Leasing The use of highly
competitive marketing strategies to lease
vacant space or to obtain above market
rents.
Alienation Clause A type of acceleration
clause, calling for a debt under a mortgage
or deed of trust to be due in its entirety
upon transfer of ownership of the secured
property. Also called a “due-on-sale”
clause.
Alternative or "Specialty" Investments
Property Types that are not considered
conventional institutional-grade real estate
investments. Examples include congregate
care facilities, self-storage facilities, mobile
home parks, vacant land, timber land, farm
land and parking garages, dockominiums
(condos for boats), single-family residences
and special-use properties like medical
office buildings, hospitals, resorts and
other recreational facilities.
Allocation Percentage The percentage of
an investment which is allocated to an
investor or investment account.
All Risk Insurance A general term for
standard property insurance covering loss
from fire, explosion, windstorm, and other
perils. "All Risk" is a misnomer as most All
Risk policies exclude specific risks such as
pollution, flood and earthquake. Coverage
for these risks frequently may be obtained
by purchasing riders to the basic property
insurance policy. See: Named Perils;
Difference in Conditions.
Alpha Most commonly used with mutual
funds, alpha describes the difference
between a fund’s actual return and it’s
expected return, given the level of risk it
takes, as measured by beta. A fund with a
positive alpha has done better than
expected, while a fund with a negative
alpha had underperformed.
ALTA The American Land Title
Association. An organization composed of
title insurance companies, which has
adopted certain insurance policy from to
standardize coverage on a national basis.
See: Survey.
American Institute of Real Estate
Appraisers A professional institute to
promote the quality of the appraisal
industry through education of its members.
The Institute is associated with the
National Association of Realtors. See also:
MAI.
Amortization The liquidation of a
financial debt through regular periodic
installment payments; for tax purposes, the
periodic deduction of capitalized expenses
such as organization costs.
