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1031 Exchange: A real estate transaction involving the sale of one property and the purchase of another that defers taxes on the income from selling the first property. Internal Revenue Section Code 1031 states that no gain or loss is recognized on the exchange of like-kind property of equal or greater value. For a more detailed explanation of 1031 exchanges, please view the 1031 Exchange page on the Willis Ventures website.
Acceleration Clause: A provision in a loan that allows a lender to demand payment of the total outstanding balance or demand additional collateral under certain circumstances, such as failure to make payments, bankruptcy, or nonpayment of taxes on mortgaged property.
Ad valorem: Meaning "according to value," this is a tax imposed on the value of property that is typically based on the local government's appraisal of the property.
Amortization Term: The length of time required to amortize the mortgage loan expressed as a number of months.
Amortization: The gradual repayment of a mortgage through monthly payments.
Anchor: The tenant that serves as the main draw to a commercial property or shopping center, usually the largest tenant in a shopping center.
Annual Percentage Rate (APR): The annual cost of a mortgage, including interest, loan fees and other costs, stated as a percentage of the loan amount.
Appraisal: An estimate of a property's fair market value that is typically based on replacement cost or comparable sales price.
Appreciation: An increase in the value or price of an asset.
Assignment: Assignment is a legal term used to transfer interest or obligation from one person to another.
Base Principal Balance: The original mortgage amount without regard to accrued interest or other unpaid debt.
Base Rent: A set amount used as a minimum rent with provisions for increasing the rent over the term of the lease.
Base Year: Actual taxes and operating expenses for a specified year, most often the year in which a lease commences.
Big Box Retailer: Usually referring to a national retailer that is a main draw (traffic generator) to a shopping center. Most often the building sizes are 50,000+ square feet.
Boot: Used to describe non-qualifying as a “like-kind” property in a 1031 exchange. This amount is subject to tax. Please view the 1031 Exchange page of the Willis Ventures website for more detailed information.
Borrower (Mortgager): One who applies for and receives a loan in the form of a mortgage with the intention of repaying the loan in full.
Building Code: The various laws set by local, state or federal law that dictates the criteria for design, materials, and types of improvements allowed.
Build-to-Suit: A method of leasing property whereby the developer/landlord builds to a tenant’s specifications.
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