Top Adding - Real Estate

Commercial real estate investment is a new territory for many real estate investors. The following is the alphabetical list of most commonly used terms in this area.

Anchored tenants: big brand-nam

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

e national tenants, e.g. Albertsons, Longs Drug, Walmart that bring in lots of traffic to the shopping center.

CAM: Common Area Maintenance. Associated with CAM is CAM fees. For NNN leases, the ter

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

CAM fees refer to the money tenants pay landlord to cover property taxes, insurance and maintenance.

Cap rate: Capitalization rate or the ratio of Net Operating Income over purchase price. The hig

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

er the cap rate, the higher the rental income in term of percentage. For people who invest in the stock market, cap rate is the inverse of P/E ratio. Cash on cash: annual percentage return of you

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

down payment not including appreciation.

Conduit loan: also called Commercial Mortgage Backed Securities (CMBS) loan often with the lower rate than traditional commercial loan but either has high

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

re-payment penalty (called defeasance or Yield Maintenance Penalty) or does not have payoff flexibility.

CPD: Car Per Day or traffic volume on a road.

CPI: Consumer Price Index. It's ofte

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

n used to calculate annual rental increase to compensate for inflation.

Due Diligence Period: the duration after acceptance normally 15-30 days to allow buyer to investigate about the property. Bu

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

er can cancel the contract during this time for any reasons and get full refund of the deposit.

Estoppel Certificate: a letter provided and signed by tenant confirming the current rent and terms.

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

b>Full-service lease: lease in which tenant pays rent that covers everything including utilities.

Gross income: total annual income before any expenses.

Gross lease: lease in which te

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ants just pay rent. Landlord pays tax, insurance, & maintenance.

GLA: Gross Leaseable Area or total rentable area. This is the space that can be leased and receive rental income. It does not inclu

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

e spaces for utilities room, elevator, etc.

GRM: Gross Rent Multiplier for apartment. Ratio of purchase price over annual income.

LLC: Limited Liabilities Company. A legal entity many inve

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

stors formed to own commercial properties.

LOI: Letter of Intent/Interest or the normally non-binding offer letter used to make an offer to buy a commercial property.

MAI appraiser: Member

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

Appraisal Institute commercial appraiser.

Master lease: lease signed by the seller to rent the vacant space to provide rent guarantee.

Mixed Use: commercial properties with retail on 1st f

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

oor and apartment on upper floors.

Triple Net (NNN) lease: lease in which tenants pay base rent plus property tax, insurance & CAM fees. Absolute NNN lease is NNN lease that tenants also pay proper

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

y management fee.

NOI: Net Operating Income. Annual income minus Property Taxes, insurance & CAM fees.

Pad: stand alone building in a prime location of a big shopping center.

Pass Thru

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

see reimbursement.

Percentage lease: lease in which tenant pays base rent plus a percentage of tenant's revenue.

Phase I Report: inspection report that provides an assessment for soi

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

l/environment contamination. It's normally required by the lender as part of loan approval process for a commercial property.

Phase II Report: inspection report for soil & groundwater subsurface i

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

vestigation. This inspection is more extensive which involves testing to see if there is any soil and water contamination.

Proforma income: potential, i.e. higher, income when the property is 100%

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

leased.

Proforma Cap rate: potential cap rate assuming property is 100% leased at market rent.

Reimbursement: the share of property tax, insurance & CAM fees that a tenant has to pay the l

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

ndlord besides the base rent.

Rent guarantee: rent paid by the seller to buyer for vacant spaces until they are leased.

SBA Loan: a government-guaranteed loan for owner-occupied properties

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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