Sale and Leaseback - A situation in which the grantor in a deed to a parcel of property sells it and retains possession by simultaneously leasing it from the grantee.
Sales Comparison Approach - A method of estimating the value of real property by comparing recent sales of comparable properties to the subject property after making appropriate adjustments for any differences. The comparable properties chosen should be substantially similar to the subject property and should be arms-length transactions.
Secondary Mortgage Market - The means by which existing first mortgages are bought and sold. The secondary mortgage market provides a lender with an opportunity to sell a loan before its maturity date, thereby providing greater availability of funds for additional mortgage lending.
Self-Amortizing Loan - A mortgage loan that requires level annual payments sufficient to meet the interest requirements and fully repay the entire principal over its term.
Separate Property - Real property owned by one spouse exclusive of any interest of the other spouse.
Servicing Fee - The periodic (monthly or annual) payment made by the purchaser of a mortgage (Lender) to the mortgage banker (correspondent) who originally made the loan for servicing the loan. The fee, which varies from one-eight to one-half percent of the outstanding loan balance, covers the administrative costs of servicing such as collection and payment of property taxes and property insurance premiums. Servicing rights may be bought and sold along with the loan.
Special Assessment - Any special charge levied against real property for public improvements the benefit the assessed property.
Spread - The difference between the rate at which money can be borrowed and the rate at which it is loaned. Typically the rate (percentage amount) that is added to the Treasury Bill by a Lender when quoting a rate to a borrower.
Stabilized - Term associated with the operation of a property wherein the income and expenses have achieved and maintained a consistent level of performance. The minimum is usually established when the property has performed at specific minimum for ninety (90) days.
Stabilized Occupancy - The optimum range of long-term occupancy that an income-producing real estate project is expected to achieve after exposure for leasing in the open market for a reasonable period of time at terms and conditions comparable to competitive offerings.
Step-Up Lease (Graded Lease) - A lease specifying set increases in rent at set intervals during the term of the lease.
Straight Lease (Flat Lease) - A lease specifying a fixed amount of rent that is to be paid periodically, typically monthly, during the entire term of the lease.
Strip Center - Any shopping area comprised of a row of stores but smaller than a neighborhood center anchored by a grocery store.
Subordinated Ground Lease - A land (ground) lease in which the rent payment due from the lessee (borrower) to the lessor (land owner) is subordinated to the debt service owed by the lessee (borrower) to the mortgagee (lender). Normally, a ground lease contains a subordination clause because without it, construction of improvements may be more difficult. A mortgage lender will consider the full value of the property only with a subordinated ground lease.
Subordination Agreement - An agreement by which the tenant agrees to the priority of a mortgage over the leasehold interest, or other claim held by the tenant on the property.
Survey - The process by which the precise physical boundaries of a parcel of land are measured. Legal descriptions appear in title reports, sales contracts, deeds, mortgages, notes, and other instruments involving rights and interests in real estate. When land is conveyed from one party to another, the survey provides a visual representation of the legal description. An ALTA survey additionally delineates the exact location of all improvements, encroachments, easements and other matters affecting the title to the property in question. A survey may be required by a title insurance company whenever the company is requested to issue an ALTA Extended Coverage Policy.
Swap Spread - The exchange of one asset or liability for a similiar asset or liability to lengthen or shorten maturities, also raise or lower coupon rates, or exchange fixed and variable payment streams.
Synthetic Lease - A transaction that appears as a lease from an accounting standpoint but as a loan from a tax standpoint.