Glossary

Terms for Buyers

Buyer Proposals — Letters of Intent (the buyer provides it to the seller)

Cap Rate — The net operating income/weighted average cost of capital, debt, or equity

Cash on Cash — Return on an unleveraged transaction calculated as the amount the investor made on the property in relation to the amount invested in the same year.

Debt Service Coverage Ratio — The ratio of cash available to debt servicing for interest, principal and lease payments.

Rent Roll — Current income derived from the asset.

Operating Statement — The income and expenses of a property, also known as the profit and loss statement.

Lease Abstract — A summary of the key financial, business, and legal information defined in a commercial lease.

18-Foot Clear Height — The measurement taken from the floor to the underside of the roof deck, in this case 18 feet.

Truck Court — The exterior area next to an industrial building’s loading docks where trucks maneuver.