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Commercial Real Estate Glossary: (I-H)

Index Lease
A lease in which the rental amount adjusts according to changes and/or movements in a price index, commonly the consumer price index

Industrial Park
Industrial space category that is a planned development often controlled and administered by one person or an investment entity such as a real estate investment trust (REIT). The types and character of uses area controlled to protect and preserve compatibility. Industrial parks can served mixed-use, single-use, special scientific and technological uses, or sophisticated communications uses.

Industrial Property
Commercial properties that area used for the purposes of production, manufacturing or distribution. Types of industrial properties include: bulk, freestanding, industrial park, multi-tenant, office/service, office/warehouse, and research and development.

Initial Investment
The outlay of cash needed to acquire an investment

Internal Rate of Return (IRR)
The percentage rate earned on each dollar that remains in an investment each year. The IRR of an investment is the discount rate at which the sum of the present value of future cash flows equals the initial capital investment.

Inventory
The supply or stock of a given commodity or a listing thereof

Landlord
The owner of a leased property

Lease
A contract stating the relationship between landlord and tenant that grants a right to exclusive possession or use of property, usually in return for a periodic payment called rent

Lessee
The party renting or leasing a property

Lessor
The party who rents or leases a property to another

Leverage
The use of borrowed funds to finance a portion of the cost of an investment

Liquidity
The ability to convert an investment into cash quickly without loss of principal

Low-rise
An office building that the Building Owners and Managers Association defines as fewer than seven stories above ground

Macroeconomy
Used synonymously with the national economy, it is used in reference to matters of economy or economic factors and forces portrayed or operating at the macro level.

Market Area
A geographical area in which supply and demand operate to influence the course of industrial and commercial activities. A Metropolitan Statistical Area (MSA) is a common example of a market area

Metropolitan Statistical Area (MSA)
Generally, the area in and around a major city. The Office of Management and Budget defines and MSA as city with a population of at least 50,000, or an urbanized area with a population of at least 50,000 within a total metropolitan population of 100,000

Mid-Rise
An office building that the Building Owners and Managers Association defines as between seven and twenty-five stories above ground

Mortgage
The legal document that secures property for the repayment of funds borrowed to purchase real estate

Multi-Family Housing
Housing units that accommodate more than one family or household

Multi-tenant
Industrial space category that attracts the smallest user of industrial space (1,000 to 5,000 square feet). It is often situated in a complex of similar buildings, where necessary support services area located in or near the complex. Multi-tenant properties might contain incubator space for start-up high tech, warehousing, or distribution tenants renting on a short-term basis. Buildings for such tenants usually require 18-foot or higher ceilings, efficient truck-loading arrangements, and office space.