Global Definitions Database

Vacancy (Based on estimated rental value)

Estimated rental income of vacant space / (contractual rental income of occupied space + estimated rental income of vacant space).

Vacancy (Based on leasable floor space)

A measure of the level of vacant space, which is calculated based on net leasable floor space.

Vacancy Loss

Loss of potential rent revenue attributable to unoccupied space, expressed as a total dollar amount per year.

Valuation

1. The process of determining the worth of an asset or a fund. 2. The result of that process: the estimated worth or sales price of an asset or fund.

Valuation costs

Costs in connection with the external (third party) appraisal of the real estate assets and liabilities owned by the vehicle. Appraisals may be performed routinely or ad-hoc which can be triggered by certain provisions in the vehicle agreement.

Valuation Policy

A legally binding policy that defines how, by whom and how frequently investments will be valued.

Valuation Risk

The risk that an asset is overvalued and is worth less than expected when it matures or is sold.

Value Creation

The performance of actions that increase the worth of goods, services, and/or a business.

Value-added (INREV Style)

A fund which may invest in any property type and deliver returns from a balance of income return and capital appreciation. The fund may allocate part of its investments in development. Typically it will also invest in forms of active management, such as active leasing risk, repositioning or redevelopment to generate returns through adding value to the property. The fund will use moderate leverage.

Value-added (RS Style)

An account that generally includes a mix of core investments and noncore investments that will have less stable income streams. The Account as a whole is likely to have moderate lease exposure and moderate leverage. As a result, such Accounts should achieve a significant portion of the return from appreciation/ depreciation and are expected to exhibit moderate volatility.

Value-Weighted Index

A type of market index with individual components, or securities, weighted according to their total market capitalization; components with larger market capitalization exert a greater impact on the index value while components with a smaller market capitalization carry less significance; also known as a “capitalization-weighted index”.

Variable Cost or Expense

A cost or an expense that rises or falls in direct proportion to production volume.

Variance

A measure of the spread between numbers in a data set; measures how far each number in the set is from the mean.

Vehicle

The overarching term for any kind of investment structure, including funds, joint ventures, club deals and separate or single accounts.

Vehicle administration costs

Costs related to bookkeeping activities either paid to a 3rd party service provider or the manager/advisor.

Vehicle Documentation

The key documents, including their annexes, establishing a contractual framework of how the Vehicle will operate and the significant legal rights and obligations of the parties entering those agreements related to the Vehicle. For example, these include funds, partnerships, joint ventures or trust agreements.

Vehicle formation costs

Also known as set-up costs, these charges are incurred at the launch of a vehicle, and do not relate to the portfolio acquisition and financing structure. These include organisational costs (typically legal & notary services) as well as syndication costs, various marketing costs, including printing / publication, and initial subscription fees.

Vehicle Formation Date

The date on which the Vehicle was legally established and became available for investors.

Vehicle Loan to Value (LTV)

Nominal value of debt, or book value, which includes third party facilities or credit lines (and any drawn equity bridge), over the GAV of the vehicle.

Vehicle Manager

See definition Investment Manager.

Vehicle Reporting Currency

This is a denomination in which a Vehicleprepares and presents its financial statements and other financial information.

Vehicle-level loan to cost

The consolidated total external amount of leverage at the vehicle level as a percentage of the (historical acquisition) cost of the vehicle.

Venture Capital

A form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.

Venture Capital Operating Company (VCOC)

A term used in the context of a fund that is relying on the operating company exception to holding plan assets under ERISA.

Vertically Integrated Manager

An investment manager that employs a full spectrum of professionals needed to buy, operate and develop properties.  Often regionally-focused specialists with full development, leasing and sometimes property management capabilities.  

Vintage Year

A vintage year of an investment vehicle may be determined by using the following two methods: 1. The year when the first committed capital agreement from outside investors is closed and legally binding. 2. The year of the investment vehicle's first drawdown or capital call from its investors. The user should specify which definition is being used and presented for investor reporting purposes. Reference: GIPS

Visibility

The degree to which a property has exposure and can be seen by the public through location and/or signage.

Void rate

A measure of the level of vacant space, which is calculated based on floor space or estimated rental value.

Volatility

A statistical measure of the dispersion of returns for a given security or market index.