Ever wondered why real estate professionals sound like they’re speaking in alphabet soup? Or why their emails look like someone fell asleep on their keyboard? Here’s your definitive guide to the acronyms that make the real estate world go ‘round (and make newcomers scratch their heads):
| Acronym | Full Name | Brief Explanation |
|---|---|---|
| ABR | Annual Base Rent | The minimum guaranteed rent specified in a lease agreement |
| ACM | Asbestos-Containing Material | Materials used in construction that contain asbestos |
| ADA | Americans with Disabilities Act | Federal law requiring accessible design in commercial facilities |
| AEI | Additional Exterior Improvements | Upgrades made to a building’s exterior beyond basic requirements |
| AFUE | Annual Fuel Utilization Efficiency | Measure of heating equipment efficiency |
| ALTA | American Land Title Association | Organization that sets standards for title insurance industry |
| ARB | Appraisal Review Board | Panel that reviews property appraisals |
| ASC | Ambulatory Surgery Center | Outpatient surgical facility |
| BEP | Break-Even Point | Point at which total costs equal total revenues |
| BOMA | Building Owners and Managers Association | Organization setting industry standards for building measurements |
| BPS | Basis Points | Unit of measure equal to 1/100th of a percentage point |
| BSQFT | Buildable Square Feet | Amount of space that can be constructed on a property |
| CAGR | Compound Annual Growth Rate | Rate of return over multiple time periods |
| CAM | Common Area Maintenance | Expenses for maintaining shared building areas |
| CAP Rate | Capitalization Rate | Property’s net operating income divided by market value |
| CBD | Central Business District | Downtown or primary business area of a city |
| CCR | Covenant, Conditions, and Restrictions | Rules governing property use |
| CDL | Commercial Driver’s License | License required for operating large commercial vehicles |
| CMBS | Commercial Mortgage-Backed Securities | Securities backed by commercial mortgages |
| CO | Certificate of Occupancy | Document certifying building is safe for occupancy |
| CPI | Consumer Price Index | Measure of average change in consumer prices |
| CPI-U | Consumer Price Index for All Urban Consumers | Price index specific to urban consumers |
| CRE | Commercial Real Estate | Property used for business purposes |
| DSA | Designated Service Area | Specific geographic area served by a facility |
| DSCR | Debt Service Coverage Ratio | Measure of ability to pay debt obligations |
| EA | Easement Agreement | Right to use another’s property for specific purpose |
| EBITDA | Earnings Before Interest, Taxes, Depreciation, and Amortization | Measure of company’s operating performance |
| EMD | Earnest Money Deposit | Initial deposit showing serious intent to purchase |
| ETJ | Extraterritorial Jurisdiction | Legal authority beyond normal boundaries |
| EUL | Estimated Useful Life | Expected functional lifespan of property or equipment |
| FAR | Floor Area Ratio | Building’s total floor area to lot size ratio |
| FF&E | Furniture, Fixtures, and Equipment | Movable property items in a building |
| FFO | Funds from Operations | Measure of REIT operating performance |
| FMR | Fair Market Rent | Estimated market rental rate |
| FONSI | Finding of No Significant Impact | Environmental assessment conclusion |
| FSG | Full-Service Gross Lease | Lease where landlord pays all expenses |
| GBA | Gross Building Area | Total constructed area of a building |
| GFA | Gross Floor Area | Total floor space within a building |
| GLA | Gross Leasable Area | Total area available for tenant occupancy |
| GRM | Gross Rent Multiplier | Property price divided by gross rental income |
| GSF | Gross Square Footage | Total square footage of a building |
| HVAC | Heating, Ventilation, and Air Conditioning | Building climate control systems |
| IDF | Intermediate Distribution Frame | Telecommunications connection point |
| IFMA | International Facility Management Association | Professional organization for facility managers |
| IRR | Internal Rate of Return | Measure of investment profitability |
| LMA | Local Market Area | Specific geographic market region |
| LOA | Letter of Agreement | Formal written understanding between parties |
| LOI | Letter of Intent | Document outlining proposed business deal |
| LTAC | Long Term Acute Care Facility | Healthcare facility for extended patient care |
| LTV | Loan-to-Value Ratio | Loan amount compared to property value |
| MEP | Mechanical, Electrical, and Plumbing | Essential building systems |
| MG | Modified Gross Lease | Lease splitting some expenses between parties |
| MOB | Medical Office/Outpatient Building | Healthcare facility for outpatient services |
| MOU | Memorandum of Understanding | Preliminary agreement document |
| NDA | Non-Disclosure Agreement | Confidentiality agreement |
| NN | Double Net Lease | Lease where tenant pays taxes and insurance |
| NNN | Triple Net Lease | Lease where tenant pays all expenses |
| NOI | Net Operating Income | Property income after operating expenses |
| OPR | Owner’s Project Requirements | Document defining project goals and criteria |
| OZ | Opportunity Zone | Designated area for tax-advantaged investments |
| PEG | Private Equity Group | Investment firm using private capital |
| PGI | Potential Gross Income | Maximum possible rental income |
| PITI | Principal, Interest, Taxes, and Insurance | Components of mortgage payment |
| PSF | Per Square Foot | Measurement of cost per square foot |
| PUD | Planned Unit Development | Mixed-use development project |
| QOZ | Qualified Opportunity Zone | Tax-advantaged investment area |
| RBA | Rentable Building Area | Total area that can be rented |
| REIT | Real Estate Investment Trust | Company owning/operating income-producing real estate |
| RFI | Request for Information | Document requesting project information |
| RFP | Request for Proposal | Document soliciting business proposals |
| RFQ | Request for Qualifications | Document requesting vendor qualifications |
| ROFO | Right of First Offer | Right to make first offer on property |
| ROFR | Right of First Refusal | Right to match another’s offer |
| ROI | Return on Investment | Measure of investment profitability |
| RSF | Rentable Square Footage | Actual space available for rent |
| SBA | Small Business Administration | Government agency supporting small businesses |
| SFR | Single Family Residence | Stand-alone residential property |
| SLR | Sale-Leaseback | Transaction where seller becomes tenant |
| SNDA | Subordination, Non-Disturbance, and Attornment Agreement | Establishes rights between tenant and lender |
| SNF | Skilled Nursing Facility | Healthcare facility providing nursing care |
| TI | Tenant Improvements | Customization of rental space for tenant |
| TIC | Tenants in Common | Shared property ownership structure |
| TICAM | Taxes, Insurance, and Common Area Maintenance | Common lease expenses |
| TTI | Time to Income | Period until property generates revenue |
| UBIT | Unrelated Business Income Tax | Tax on non-exempt business income |
| UPREIT | Umbrella Partnership Real Estate Investment Trust | REIT partnership structure |
| USF | Usable Square Footage | Actual space used by tenant |
| UST | Underground Storage Tank | Below-ground storage container |
| WALT | Weighted Average Lease Term | Average remaining lease duration |
| WACC | Weighted Average Cost of Capital | Average cost of financing |
| WBL | Whole Building Lease | Lease of entire building |
| WIP | Work in Progress | Ongoing construction or improvements |
| ZAC | Zoning Appeals Committee | Board reviewing zoning appeals |
| ZBA | Zoning Board of Appeals | Board handling zoning disputes |