Balloon, or bullet, loan: A loan with a maturity that is shorter than the amortization period. At the end of the period, the borrower must pay off the amount due, request an extension or refinance.
Balloon Risk: The risk that a borrower will not be able to make a balloon (lump sum) payment at maturity due to a lack of funding
Bankrupt: The state of an entity that is unable to repay its debts as they become due
Bankruptcy: Proceedings under federal statutes to relieve a debtor who is unable or unwilling to pay its debts. After addressing certain priorities and exemptions, the bankrupt entity’s property and other assets are distributed by the court to creditors as full satisfaction for the debt.
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Base Principal Balance: The original mortgage amount adjusted for subsequent fundings and principal payments 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
Basis point: 1/100 of 1 percent
Below-Grade: Any structure or portion of a structure located underground or below the surface grade of the surrounding land
Bid: An offer, stated as a price or spread, to buy whole loans or securities
Blind Pool: A commingled fund accepting investor capital without prior specification of property assets
Book Value: Also referred to as common shareholder’s equity, this is the total shareholder’s equity as of the most recent quarterly balance sheet minus preferred stock and redeemable preferred stock.
Broker: A person who acts as an intermediary between two or more parties in connection with a transaction
Buildable Acres: The area of land that is available to be built on after subtracting for roads, setbacks, anticipated open spaces and areas unsuitable for construction
Building code: The various laws set forth by the ruling municipality as to the end use of a certain piece of property. They dictate the criteria for design, materials and types of improvements allowed. See also zoning and permits.
Building Standard Plus Allowance: The landlord lists, in detail, the building standard materials and costs necessary to make the premises suitable for occupancy. A negotiated allowance is then provided for the tenant to customize or upgrade materials. May or may not be part of tenant allowance.
Build-Out: Space improvements put in place per the tenant’s specifications. Takes into consideration the amount of tenant finish allowance provided for in the lease agreement.
Build-to-Suit: A method of leasing property whereby the developer/landlord builds to a tenant’s specifications