Land Acquisition Loan - A loan made for the purpose of purchasing land only not improvements on or to the land. Also called an acquisition loan.
Lease Abstract - A detailed recap of office and retail leases including tenant name, suite #, square footage, current rental rate including increases, lease start date, term, CAM requirements, extension options and rates.
Lease Commencement Date - The date upon which the lease commences and the obligations of the parties begins (see also "rent commencement date").
Leasehold Improvements - Construction or improvements for the purpose of preparing the premises for the conduct of tenant's business. Improvements permanently attach to the premises unless they are trade fixtures, and they remain with the premises after the end of term of the lease.
Leasing Commission (Reserve) Escrow - The annual cost related to the leasing and releasing of commercial office and retail space. The amount deducted from the Net Operating Income prior to determining the net cash flow available for debt service coverage.
Legal Description - A description of land recognized by law, based on government surveys, spelling out the exact boundaries of the entire piece of land. It should so thoroughly identify a parcel of land that it cannot be confused with any other.
Lessee - An individual or entity to whom property is rented under a lease. A tenant.
Lessor - An individual or other entity - one who rents property to another under a lease. A landlord.
Letter of Credit - An arrangement, with specified conditions, whereby a bank agrees to substitute its credit for a customer's.
Letter of Intent (LOI) - An informal, usually non-binding, agreement among parties indicating their serious desire to move forward with negotiations.
Leveraged Buy-out - The acquisition of a company, financed primarily with borrowed money, using the acquired companyˆ‚s assets to collateralize the loan.
LIBOR -(London Interbank Offered Rate) - The rate that international banks dealing in Eurodollars charge each other for large loans. Some domestic banks and other lenders use this rate as an index for adjustable rate mortgages. The LIBOR rate quoted in the Wall Street Journal is an average of rate quotes from five major banks. Bank of America, Barclays, Bank of Tokyo, Deutsche Bank and Swiss Bank.
Lien Waiver - A waiver of mechanic's lien rights signed by a general contractor and his subcontractors.
Limited Partnership - Arrangement in which there is at least one partner whose liability extends beyond monetary investment and at least one partner who is passive and limits liability to the amount invested.
Lis Pendens - a recorded notice of pending legal action, which notifies prospective purchases and encumbrances that any interest acquired by them in a property litigation is subject to the decision of the court.
Load Factor - The amount of square footage is a lease, in addition to a tenant's usable square footage, which represents tenant's pro rata share of the building's common area/s. May also be referred to as a percentage of building's rentable square feet.
Loan Application Fee - A charge required by a lender or loan originator to be paid by the borrower to cover the credit report, property appraisal and other incidental expenses associated with underwriting the loan. The fee is generally not refundable.
Loan Origination Fee - Fee charged by a lender for processing a mortgage, usually expressed as a percentage of the loan (or points), which pays for the work in evaluating and processing the loan.
Loan-To-Value Ratio - The amount of money borrowed compared to the cost or value (appraised or sale price) of the real property purchased.
Lock-Box - Rental income is delivered to a trustee (or servicer), who then pays expenses and makes the loan payment, before excess cash is released to theborrower. The lock-box removes borrower discretion and control over funds.
Locked-in Interest Rate - The rate promised by a lender at the time of loan application or commitment. On income property loans, a lock-in generally requires a commitment fee or rate lock fee from the loan applicant.