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Magic page: Included in the offering prospectus, the magic page
is a projected growth story, describing how a new REIT will accomplish its
future expectations for funds from operations or funds available for
distribution.
Maker: One who creates or executes a promissory note and promises to
pay the note when it becomes due
Mark to market: The process of increasing or decreasing the original
investment cost or value of a property asset or portfolio to a level
estimated to be the current market value
Market capitalization: One measure of the value of a company; it is
calculated by multiplying the current share price by the current number of
shares outstanding.
Market rental rates: The rental income that a property most likely
would command in the open market, indicated by the current rents asked and
paid for comparable space
Market study: A forecast of future demand for a certain type of real
estate project that includes an estimate of the square footage that can be
absorbed and the rents that can be charged
Market value: The highest price a property would command in a
competitive and open market under all conditions requisite to a fair sale
Marketable title: A title free from encumbrances that could be
readily marketed to a willing purchaser
Master lease: A primary lease that controls subsequent leases and may
cover more property than subsequent leases
Master servicer: An institution that acts on behalf of a trustee for
the benefit of security holders in collecting funds from a borrower,
advancing funds in the event of delinquencies and, in the event of default,
taking a property through foreclosure
Maturity date: The date when the total principal balance comes due
Mechanic's lien: A claim created for the purpose of securing priority
of payment of the price and value of work performed and materials furnished
in constructing, repairing or improving a building or other structure
Meeting space: In hotels, space made available to the public to rent
for meeting, conference or banquet uses
Metes and bounds: The boundary lines of land described by listing the
compass directions and distances of the boundaries. Originally, metes
referred to distance and bounds referred to direction.
Mezzanine financing: Mezzanine financing is somewhere between equity
and debt. It is that piece of the capital structure that has senior debt
above it and equity below it. There is both equity and debt mezzanine
financing, and it can be done at the asset or company level, or it could be
unrated tranches of CMBS. Returns are generally in the mid- to high-teens.
Mid-rise: A building with four to eight stories above ground level.
In a central business district this might extend to buildings up to 25
stories.
Mixed-use: Space within a building or project providing for more than
one use
Modern portfolio theory (MPT): An approach to quantifying risk and
return in a portfolio of assets. Developed in 1959 by Harry Markowitz, MPT
is the foundation for present-day principles of investment diversification.
It emphasizes the portfolio rather than individual assets, and how assets
perform in relation to each other based on the assumption that investors can
benefit from diversification when asset class returns do not move in lock
step with one another.
Mortgage: A legal document by which real property is pledged as
security for repayment of a loan until the debt is repaid in full
Mortgage constant: The ratio of an amortizing mortgage payment to the
outstanding mortgage balance
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