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Face rental rate: The asking rental rate published by the
landlord
Facility space: The floor area in hospitality properties dedicated to
operating departments such as restaurants, health clubs and gift shops that
service multiple guests or the general public on an interactive basis not
directly related to room occupancy
FAD (funds available for distribution): Funds from operations less
deductions for cash expenditures for leasing commissions and tenant
improvement costs
FAD multiple: Share price of a REIT divided by its funds available
for distribution
Fair market value: The sale price at which a property would change
hands between a willing buyer and willing seller, neither being under any
compulsion to buy or sell and both having reasonable knowledge of the
relevant facts
Fannie Mae (FNMA): The Federal National Mortgage Association - A
quasi-governmental corporation authorized to sell debentures in order to
supplement private mortgage funds by buying and selling FHA (Federal Housing
Administration) and VA (Veterans Affairs) loans at market prices.
Fee simple interest: When an owners owns all the rights in a real
estate parcel
FFO (funds from operations): A ratio intended to highlight the amount
of cash generated by a company's real estate portfolio relative to its total
operating cash flow. FFO is equal to net income, excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation and
amortization.
FFO multiple: Share price of a REIT divided by its funds from
operations
Fiduciary: The Employee Retirement Income Security Act (ERISA)
defines a fiduciary as any person who exercises any discretionary authority
or control over a plan's asset management, administration or disposition, or
renders investment advice for a fee or other compensation with respect to a
plan's assets. Fiduciaries may include staff, trustees, investment board
members, administrators, consultants, actuaries and investment managers.
ERISA permits civil action to be brought by a beneficiary against any
fiduciary that has breached its fiduciary duty. Fiduciaries can be held
personally liable for any losses to a plan resulting from such breach.
Finance charge: The amount paid for the privilege of deferring
payment of goods or services purchased, including any charges payable by the
purchaser as a condition of the loan
First mortgage: The senior mortgage that, by reason of its position,
has priority over all junior encumbrances. The holder has a priority right
to payment in the event of default.
First refusal right, or right of first refusal: A lease clause giving
a tenant the first opportunity to buy a property or lease additional space
in a property at the same price and on the same terms and conditions as
those contained in a third-party offer that the owner has expressed a
willingness to accept
First-generation space: Generally refers to new space that is
currently available for lease and has never before been occupied by a tenant
First-loss position: The position in a security that will suffer the
first economic loss if the underlying assets lose value or are foreclosed
on. The first-loss position carries a higher risk and a higher yield.
Fixed costs: Costs that do not fluctuate in proportion to the level
of sales or production
Fixed rate: An interest rate that remains constant over the term of
the loan
Flat fee: A fee paid to an adviser or manager for managing a
portfolio of real estate assets, typically stated as a flat percentage of
gross asset value, net asset value or invested capital
Flex space: A building that provides a configuration allowing
occupants a flexible amount of office or showroom space in combination with
manufacturing, laboratory, warehouse, distribution, etc.
Float: The number of freely traded shares in the hands of the public
Floor area ratio (FAR): The ratio of the gross square footage of a
building to the square footage of the land on which it is situated
Force majeure: A force that cannot be controlled by the parties to a
contract and prevents them from complying with the provisions of the
contract. This includes acts of God such as a flood or a hurricane, or acts
of man such as a strike, fire or war.
Foreclosure: The process by which the trustee or servicer takes over
a property from a borrower on behalf of the lender. See
more on Foreclosure
Forward commitments: Contractual obligations to perform certain
financing activities upon the satisfaction of any stated conditions. Usually
used to describe a lender's obligation to fund a mortgage.
Four quadrants of the real estate capital markets
Freddie Mac (FHLMC): Federal Home Loan Mortgage Corp. - a corporation
established by the Federal Home Loan Bank to issue mortgage-backed
securities
Full recourse: A loan on which an endorser or guarantor is liable in
the event of default by the borrower
Full-service rent: An all-inclusive rental rate that includes
operating expenses and real estate taxes for the first year. The tenant is
generally still responsible for any increase in operating expenses over the
base year amount.
Fully diluted shares: The number of shares of common stock that would
be outstanding if all convertible securities were converted to common shares
Future proposed space: Space in a proposed commercial development
that is not yet under construction or where no construction start date has
been set. It also may refer to the future phases of a multi-phase project
not yet built.
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