Commercial Real Estate Dictionary
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C    Capital    >>    Condominium
CapitalCapital consists of the human-made resources employed to produce goods and services. The incentive to employ these resources is often income generation and wealth creation. Capital improvements projectsCapital improvement projects are investments in infrastructure. Examples of capital improvement projects include the construction, repair, or replacement of buildings, roadways, bridges, parks, and ports. Capital marketCapital markets are financial markets in which medium or long term debts and equities are exchanged for capital. Medium or long term refers to the underlying financial instrument or asset traded of having a term or life greater than one year. CapitalizationCapitalization is the process of converting an asset's net operating income into an estimate of value by using an appropriate percentage rate (capitalization rate). Capitalization rate (cap rate)In real estate, the capitalization rate, or cap rate, is the percentage rate used to estimate investment property value in the capitalization approach. The cap rate is used to convert net operating income into a rental property's market value.

The Cap Rate Formula:

Property Value = NOI / Capitalization Rate



The cap rate is an indicator of investment value and expectation of return. It is not the same as other measures of return such as the IRR or ROI.

Central business district (CBD)The central business district, or CBD, is the downtown or center of commercial activity in a city. The CBD serves as the basis for various urban growth models Commercial paperCommercial paper is a short-term promissory note. Commercial paper is typically unsecured. Short term generally means less than 1 year, however in the United States registration with the SEC is required for maturities greater than 270 days. Commercial real estateCommercial real estate is a category of real property that is primarily commercial in nature or purpose. Property types in commercial real estate include office, industrial, retail, and hospitality. Commitment letterA commitment letter is an official document from a lender indicating approval of the borrower and the terms and conditions of the prospective loan. Community builderOne who engages in the platting and improvement of subdivisions. Comparable propertyA comparable property is a property selected to help estimate the value of a subject property in a given market. A comparable property is also referred to as a "Comp". The comparable property must be relevant in terms of features and attributes that are determinants of value in a market within a given time frame. Compound interestCompound interest is interest earned on interest that is reinvested at the end of each period. It is interest that is allowed to accumulate and grow on itself. Concentric zone theoryConcentric zone theory is the principle that states cities tend to grow in concentric rings around their core. The highest values and intensive uses occur at its core while values and intensity decreases moving outward. ConcessionA concession is an incentive or discount given to a tenant by a landlord to make a lease more enticing. CondominiumA condominium is a type of ownership in a property where the owner owns the unit individually in a multi-unit property while the common structures and areas are owned jointly.
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1. Capital >> Condominium
2. Construction lender >> Convertible loan
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