Glossary of Terms

Occupancy Costs

The total amount of property-related expenses paid by a tenant for use of a particular space. Occupancy costs include base rent as well as

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Operating Expenses

The actual costs associated with operating a property including maintenance, repairs, management, utilities, property taxes and insurance. 
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Operating Expenses, Fixed

The actual costs associated with operating a property that do not vary in the short term. These costs do not change with a property’s occupancy rate.

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Operating Expenses, Variable

The actual costs associated with operating a property that vary in relation to a property’s occupancy rate or volume of some activity.

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Opportunistic Property

Opportunistic properties exhibit the greatest risk but highest potential returns within the four major commercial real estate risk profiles

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Opportunity Zone

An Opportunity Zone is an economically-distressed community (see also “low-income communities”) where new investments, under certain conditions, may be eligible for preferential tax treatment.

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Opportunity Zone vs. New Market Tax Credits

Although there are similarities between the Opportunity Zone Program and the New Markets Tax Credit program, a crucial difference will be in underwriting the potential financial success of the low-income community businesses in which an Opportunity Fund invests.
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Ordinary Income

The income earned from providing services or the sale of goods. Ordinary income is composed mainly of wages, salaries, commissions and

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Origination Fee

A fee charged by a lender for processing your loan application. Similar to a broker’s commission, an origination fee is the Lender’s way of getting paid for its services. Origination fees range from 0.5% to 1.00%, and are often negotiated with the terms of the loan. In situations where a borrower desires a lower origination fee, the lender may demand an increase in the interest rate. Origination fees usually represent a higher percentage of smaller loans, as the lender is looking to make their time spent worthwhile.

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