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Real estate trends
Long-term movements or tendencies in the demand for commercial real estate (which can typically last for years or decades), usually tied to macro-economic or business cycles.
Recession
A period of reduced economic activity or a general economic downturn marked by a decline in employment, production, sales, profits, and weak economic growth that is not as severe or prolonged as a depression. As a result, sales in real estate markets are slow, property values and price levels are flat or decreasing, and there is virtually no construction of new stock given excess supply of units in most real estate markets.
Recovery
A period of increasing economic activity or a general economic upturn, typically following a stabilization of key sectors and industries, marked by increasing sales and recovering prices in real estate markets as a direct result of an external shock (for example, a favorable tax code revision) or an increase in demand for commercial real estate which, in turn, leads to the absorption of excess space. Little or no construction occurs during the initial stages of this phase until most of the excess space is absorbed or until reasonable financing opportunities become available.
Rentable area
The computed area of a building as defined by the guidelines of Building Owners and Managers Association (BOMA) and typically measured in square feet, including both core/structure and useable area. The actual square foot area for which the tenant will pay rent. It is the gross area of an office building, less uninterrupted vertical space (such as stairways and elevators). Unlike useable area, rentable area includes common areas such as lobbies, restrooms, and hallways as well as the measurement of structural columns and architectural projections.
Replacement cost
The estimated cost to construct, at current prices, a building with utility equivalent to the building being appraised, using modern materials and current standards, design, and layout.
Retail
Also see community center, fashion/specialty center, neighborhood center, outlet center, power center, regional center, super-regional center, and theme/festival center.
Revenue Center
These are different divisions that generate sales through goods and/or services. For example, in a hotel, these are the food-and-beverage departments.
Revenue Cycle
Calculations begin on the day the company meets its potential clients/customers. Transactions are followed throughout the sales period and continue on the future relationship with the client.
Revenue Leverage
This is when an individual applies for a loan to pay off the obligations on another loan.
Revenue Management System (RMS)
This is a software application that hotels use to control price and supply of their inventory in order to achieve maximum revenue.
Revenue Per Available Room (ReVPAR)
This value is calculated by taking the total room revenue for a particular period of time and then dividing that value by the average number of rooms that are available in the facility.
Revenue Per Occupied Room (ReVPOR)
This is used to appraise the performance of business in the lodging and hotel industry. This can be calculated by adding all of the income generated from an occupied room, which include all room costs and room service, and then dividing that number by the number of occupied rooms.
Risk
The probability that actual cash flows from an investment will vary from the forecasted cash flows.
