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Glossary

Common Real Estate Terms

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There are currently 15 names in this directory beginning with the letter C.
Cap Rate
The capitalization rate, or “cap rate,” is a ratio used to convert an income stream into an estimate of value. The cap rate is determined by dividing a property's net operating income by its current value at the time of acquisition. It is a key tool for estimating the potential return on investment.
Capital Expenditures (CapEx)
Capital Expenditures, also known as CapEx, are funds used to upgrade and maintain an apartment community. These expenses are considered capital expenditures when they improve the life of the property and are capitalized over the asset's useful life. Examples include interior and exterior renovations such as rebranding, flooring installations, and painting.
Capital Gain
Capital Gain is calculated as the final sale price of the investment property minus the exchange expenses and the property's adjusted basis. It represents the profit realized from the sale of an asset.
Capitalization
Capitalization is the method of determining the value of real property by examining the net operating income divided by a predetermined annual rate of return. It is a fundamental concept in real estate valuation.
Capitalization Rate (Cap Rate)
Cap Rate reflects the rate of return and is based on the income the property is expected to generate. The cap rate is the NOI (net operating income) divided by the purchase price. Also called "free and clear return". See "Capitalization".
Carrying Charges
Carrying Charges represent the costs incidental to property ownership, such as taxes, insurance, and maintenance, that must be absorbed during the lease-up of a building and periods of vacancy.
Cash Flow
Cash Flow refers to the revenue provided to investors after all expenses are paid. It is calculated by subtracting operating expenses and debt service from the collected revenue, providing insight into the property's profitability.
Cash-On-Cash (CoC)
Cash-On-Cash (CoC) measures the rate at which cash is returned in relation to the original investment, expressed as a percentage. It is calculated by dividing the cash flow by the initial investment, offering insights into the property's cash returns.
CBD: Central Business District
The Central Business District is the primary business and commercial area of a town or city, typically housing major corporate offices, retail centers, and financial institutions.
Certificate of Insurance
A Certificate of Insurance is issued by an insurance company or its agent to verify the existence of an insurance policy, including coverage amounts and insured parties.
Closing Costs
Closing Costs refer to the additional expenses incurred by buyers and sellers beyond the property's price to complete a real estate transaction. These may include legal fees, title insurance, and transfer taxes.
Commencement Date
The Commencement Date marks the effective start date of a lease agreement, outlining the beginning of the tenant's occupancy period.
Common Area
The Common Area encompasses the shared spaces of a building and its premises available for use by all tenants, such as lobbies, corridors, and parking lots.
Concessions
Concessions are incentives offered to prospective tenants to encourage lease agreements, such as discounts for extended lease terms or waived fees.
CPI
The Consumer Price Index (CPI) is an economic indicator measuring inflation, influencing changes in rental rates and lease agreements
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