Global Definitions Database

National Council of Real Estate Investment Fiduciaries (NCREIF)

NCREIF is a US based not-for-profit association of institutional real estate professionals which includes investment managers, plan sponsors, academicians, consultants, appraisers, certified public accountants (CPAs) and other service providers who share a common interest in the industry of institutional real estate investment. NCREIF is a co-sponsor of the Reporting Standards. See www.ncreif.org.

Negative Leverage

The cost of borrowed funds is greater than the free and clear internal rate of return (IRR) on the property.

Neighborhood Center (retail)

Provides for the sale of daily living needs of the immediate area. Typical area is 30,000 to 150,000 square feet with at least one anchor tenant.

Nelson Technique

An approach to estimating the retail trade area (and sales/revenue potential) for a given establishment or center.

Net Absorption

A measurement of the net change of the supply of commercial space in a given real estate market over a specific period of time; measured by deducting commercial space vacated by tenants and made available on the commercial space market from total space leased up.

Net Asset Value of Vehicle (NAV)

A vehicle’s assets less all liabilities as per the Vehicle Documentation, under the chosen GAAP.

Net Debt Yield

Net Operating Income (NOI) as a percentage of the nominal value of debt, also known as book value.

Net equivalent yield

A time-weighted average of the net initial yield and reversionary yield, representing the return a property will produce based upon the timing of the income received.

Net financing cost

All costs related to external debt (e.g., interest expenses or received, extension fees, prepayment fees, cost of related interest rate swaps), excluding amortization and distribution to investors.

Net Income

With reference to property level performance calculations: accrual basis net income of the property (which would ultimately be consolidated into the fund's net investment income).

Net Initial Yield (NIY)

The passing rent or net operating income divided by the gross property value including notional acquisition costs.

Net investment income-Operating Model

Under the Operating Model, net investment income is a measure of operating results. It is primarily intended to provide a measure of operating activity, exclusive of capitalized expenditures, such as leasing commissions, tenant improvement costs, tenant inducements and other replacement cost that can be capitalized if in accordance with GAAP. Rental income is recognized when it is contractually billable to tenants (i.e., straight-lining of rents is not applicable when real estate is reported at fair value). The recognition of rental income matches appraisal methodology which factors in the future rental income in the determination of property value. Accruing for free rent/stepped rent would in essence be accounting for the same item twice (i.e., once in the property's valuation and aging in an accounts receivable/other asset account outside the property base). Expenses are generally recognized when the obligation is incurred. Certain expenses may be based on the investment vehicle's unrealized change in net asset value, including, for example, incentive management fees, and are recognized as a component of the unrealized gain or loss.

Net Lease

A contractual agreement where a lessee pays a portion or all of the taxes, insurance fees, and maintenance costs for a property in addition to rent; in its purest form, the tenant is expected to pay for all the costs related to a property as if the tenant were the actual owner.

Net Operating Income (NOI)

The gross operating income of a property for the period less operating expenses. NOI relates to the operating portfolio of the vehicle and not (re)development assets which are reported under 'other net income.

Net return

The amount an investor earns over the stated period after all vehicle-level fees and expenses including taxes and servicing of debt are deducted.

Net Sale Price

Gross Sales Price net of any selling costs and expenses, and before debt. Selling expenses are directly attributable to the sale which are the seller's responsibility including, but not limited to, items such as commissions, disposition fees, legal fees, title insurance, escrow fees, etc.

Net Zero Carbon Building

The IPCC defines net zero as that point when “anthropogenic emissions of greenhouse gases to the atmosphere are balanced by anthropogenic removals over a specified period”.[1] With regards to real estate, “net zero carbon” is when the carbon emissions emitted as a result of all activities associated with the development, ownership and servicing of a building are zero or negative.[2] This definition encompasses the entire life cycle of a building, including construction, operation, refurbishment, and demolition, and includes emissions associated with whole-building energy use during the operational phase (operational carbon) as well as emissions embodied in building materials during the construction phase (embodied carbon). The net zero carbon balance has to be achieved on an annual basis. Consequently, these emissions include those attributable to the ownership of the real estate and from the activities of tenants in occupation. [1] IPCC Special Report: Global Warming of 1.5 degrees [2] BBP Net Zero Carbon Framework

Neutral Leverage

The cost of borrowed funds is the same as the free and clear internal rate of return (IRR) on the property.

NOI yield

NOI / fair value of investment portfolio

Nominal Alpha

The actual over (under) return relative to the market (benchmark) without taking risk into account; calculated as actual return less benchmark return.

Nominal Tax Rate

The stated tax rate, which does not necessarily correspond to the effective tax rate.

Nominal value of debt excluding shareholder loans

This includes third party portfolio facilities or credit lines (and any drawn equity bridge), with all currencies converted to vehicle currency.

Non-Amortizing Debt/Loan/Mortgage

A type of loan in which payments on the principal are not made until a lump sum is required; generally requires a higher interest rate due to the unsecured nature of the loan and lower installment payments, reducing the cash flow to the lender.

Non-Compete Clause/Provision

A clause that can be inserted into a lease specifying that the business of the tenant is exclusive in the property and that no other tenant operating the same or similar type of business can occupy space in the building.

Non-controlling effects on the INREV NAV adjustments

This adjustment represents the impact on NAV of the combined effect of the recognition of minority interest on the INREV NAV adjustments (the INREV NAV excluding non-controlling effects).

Non-Controlling Equity Interests (Minority Interest)

An ownership position that does not meet the requirements of control according to the governing accounting literature.

Non-Discretion or Non-Discretionary

The level of authority granted to an adviser or investment manager over the investment and management of client capital that permits only the undertaking of specific tasks that are authorized on a per task basis; in general, the investor retains the decision on whether to invest.

Country-by-Country Guide

Due Diligence Questionnaire (DDQ)

Standard Data Delivery Sheet (SDDS)