Global Definitions Database

B Note (Junior Debt/Loan)

The secondary tranche of an asset backed security (ABS) or other structured financial product; a B note carries a higher risk and potential higher return when compared to the investment grade A note; during bankruptcy, default, or other credit proceedings, the payment of a B note is junior or secondary to that of an A note.

Bad Boy Acts/Carve-Out

An exception to the non-recourse nature of a loan that provides for a loan party to have full or partial personal recourse liability for the loan in the event certain events occur, such as filing a voluntary bankruptcy action); In a traditional subscription-backed credit facility:  typically apply to the general partner of the fund borrowers/guarantors and are limited to actual damages of the lender arising as a result of the fraud, willful misrepresentation or willful misappropriation of loan or capital contribution proceeds on the part of such general partner.

Bank / loan / overdraft / debt interest

See definition Bank Charges.

Bank Charges

Costs charged by a financial institution to manage and maintain the cash accounts of the vehicle, or in relation to overdrawing an account.

Base Interest

Contractually stated fixed or floating rates in a participating loan (REIS)

Base Rent Income

Income derived strictly from leased space, i.e., not including percentage rents which is a separate data field.

Before-Tax Cash Flow (BTCF)

For a property, the result of calculating the effective rental income, plus other income not affected by vacancy, less total operating expenses, less annual debt service, funded reserves, leasing commissions, and capital addition; also known as “cash flow before tax (CFBT)”.

Before-Tax Internal Rate of Return (BTIRR)

An internal rate of return (IRR) calculated using before-tax net cash flows.

Benchmark

A point of reference against which an Account's performance and/or risk is compared.

Benchmark Cohort

A universe of similar investments by competing managers or investors, measured from the same inception date.

Benchmarking

The formal (quantitative) comparison of a given investment agent’s (or portfolio’s) investment performance with that of a suitably defined index or peer group over a specified time period.

Beta (β)

A measure of the volatility (or systematic risk) of an investment or a portfolio in comparison to the market as a whole.

Bitesize

A range of money that an investor looks to commit to each investment vehicle in which it invests.

Blind Pool

A commingled fund accepting investor capital without prior specification of property assets or investments.

Block Group-Based Trade Area

A geographic area containing the customers of a particular firm or group of firms for specific goods or services based upon census block groups (BGs).

Block Groups (BGs)

Statistical divisions of census tracts, generally defined to contain between 600 and 3,000 people; used to present data and control block numbering.

Blocker or Blocker Corporation

An entity, often a C-corporation, through which tax-exempt investors invest in a  fund so as to shield such tax-exempt investors from having to file a US federal tax return and/or to pay US income tax; also known as “corporate blocker”.

Borrower

The party borrowing money from a Lender. (CREFC, CRE Glossary of Terms, EU Version)

Borrower sustainability credentials

Data that reflects the sustainability performance of a borroweror sponsor and can include, but is not limited to, a corporate ESG rating and benchmarking scheme such as CDP or GRESB, among others.

Borrower sustainability scorecard

Document that outlines key sustainability attributes and risks of a borrower/sponsor.

Borrowing Base

Used in asset-based lending facilities to calculate the borrowing value of a borrower’s assets; determines the maximum borrowing availability under the line of credit; typically, a calculated by applying a discount factor to each asset class (often, though not always, constituting the collateral) against which the lender will advance funds, such as uncalled capital contributions, accounts receivable, inventory, loan assets, or the like.  

Bottom-Up Investing

An investment approach that focuses on the analysis of individual investments and de-emphasizes the significance of macroeconomic cycles and market cycles; assumes individual investments can do well even in an sector that is not performing, at least on a relative basis.

Boundaries

The boundaries that determine the direct and indirect emissions associated with operations owned or controlled by the reporting company. This assessment allows a fund manager to establish which operations and sources cause direct and indirect emissions, and to decide which indirect emissions to include which are a result of its operations. See also the following definitions on financial control, operational control and equity share.

Branch Profits Tax

Taxation under Internal Revenue Code (IRC) Section 884(a) that treats a US branch of a foreign corporation as if it were a US subsidiary of a foreign corporation for purposes of taxing profit repatriations; puts the earnings and profits of a branch of a foreign corporation deemed remitted to its home office on equal footing with the earnings and profits of a US subsidiary paid out as a dividend to its foreign parent; applies regardless of whether the US trade or business of the foreign corporation is substantial compared to its worldwide operations.

Break Costs

The cost payable by a borrowerfor early repayment of all or a portion of a loan as outlined in the break clause of the loan agreement. 

Bridge Loan

A short term loan used as interim financing, pending the arrangement of larger or longer-term financing

Brinson-Fachler (BF) Attribution Analysis

A return attribution model based upon a breakdown of the arithmetic excess return assuming a two-step investment decision process in which the portfolio manager seeks to add value through both allocation and selection decisions; differs from the Brinson-Hood-Beebower (BHB) attribution analysis model only in how individual sector allocation effects are calculated.

Brinson-Hood-Beebower (BHB) Attribution Analysis

A return attribution model based upon a breakdown of the arithmetic excess return assuming a two-step investment decision process in which the portfolio manager seeks to add value through both allocation and selection decisions.

Broker-Dealer

A firm that is in the business of buying and selling securities, including private real estate funds.  Broker-dealer licensing is required for functions such as providing investment advice to customers, market making activities, facilitating trading activities, and raising capital for companies.    

Brownfield

Land previously developed for other purposes that may not necessarily be available for immediate use without intervention (e.g. environmental contamination or existing buildings infrastructure to be demolished first).

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.

Building energy intensity

The amount of energy used per unit of an appropriate denominator (e.g. floor area, persons).

Building GHG intensity

The amount of carbon used per unit of an appropriate denominator (e.g. floor area, persons).

Building Lines

A line usually set with respect to the frontage of a plot of land which is fixed by statute or by deed or contract and beyond which the owner of the land may not build.

Building Owners and Managers Association (BOMA)

An international real estate trade organization representing owners and managers of commercial real estate; promotes, provides advocacy and develops various research publications in support of its members.

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.

Building types

Categorisation based on the function or form of a building for example: offices, shopping centres, retail warehouses, industrial, multi-family housing, hotels.

Building water intensity

The amount of water used per unit of an appropriate denominator (e.g. floor area, persons).

Bullet Repayment

A facility where the repayment (principal or principal and interest) is made in one amount on the final maturity date of the loan agreement. 

Business Enterprise

A commercial, industrial, or service organization pursuing an economic activity.

Business Enterprise Value

A term applied to the concept of an intangible, non-realty component of a property’s value probably ascribable to superior management competence; different from goodwill and going-concern value.

Business Risk

The risk associated with the possible profit outcomes of a business venture.

Business Value

The entire value of a business; the total sum of all tangible and intangible elements.