Range
The maximum distance consumers are willing to travel to purchase a good or service from a given establishment or location. Hence, the boundary or outer limits of the market area circumscribed about a location at which a good or service may be purchased can be easily identified having knowledge of the range.
Rate of return
The percentage return on each dollar invested. Also known as yield.
Real estate
See commercial real estate.
Real estate cycles (phases)
The regularly repeating sequence of economic downturns and upturns and associated changes in real estate market transactions tied to market dynamics and changing macroeconomic conditions, whose phases include (in order) recession, recovery, expansion, and oversupply.
Real estate fluctuations
Short-term variations in real estate prices or rents (usually lasting anywhere from one day to a few months) caused by natural hazards (such as tornadoes, hurricanes, floods, earthquakes, and wildfires) or boosts or shocks to the local economy (such as the entry or exit of major employers).
Real estate investment trust (REIT)
An investment vehicle in which investors purchase certificates of ownership in the trust, which in turn invests the money in real property and then distributes any profits to the investors. The trust is not subject to corporate income tax as long as it complies with the tax requirements for a REIT. Shareholders must include their share of the REIT’s income in
their personal tax returns. (Barron’s Dictionary of Real Estate Terms and Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)
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.
Regional center
This center type provides general merchandise (a large percentage of which is apparel) and services in full depth and variety. Its main attractions are its anchors: traditional, mass merchant, discount department stores, or fashion specialty stores. A typical regional center is usually enclosed with an inward orientation of the stores connected by a common walkway and parking surrounds the outside perimeter.
Regulatory requirements
In reference to land use, they are restrictions or guidelines on development or use of land, properties, or facilities as defined in accordance with design standards, building construction requirements, land use plans, occupancy codes, and zoning classifications as determined by the controlling or governing parties at the municipal or county levels.
Rent concession
A period of free rent given to the tenant by the lessor.
Rent escalators
Items specified in a lease such as base rent, operating expenses, and taxes that may increase by predetermined amounts at stated intervals or by a constant annual percentage. Also see index lease and expense stop.
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 usable 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 usable area, rentable area includes common areas such
as lobbies, restrooms, and hallways as well as the measurement of structural columns and architectural projections.
Rentable-to-useable ratio
Defined as rentable area divided by usable area. Also known as the add-on factor or load factor. Also see efficiency percentage.
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. [Appraisal Institute]
Residential property
Single- or multifamily housing units that are used, serve, or are designed as a place of residence.
Retail
Also see community center, fashion/specialty center, neighborhood center, outlet center, power center, regional center, super-regional center, and theme/festival center.
Retail gap analysis
A gap analysis performed specifically on retail floor space in a given market or trade area.
Retail gravity model
A gravity model used to estimate dollar flows to or the sale/revenue potential of competing retail establishments in a given geographic market. Also see gravity model.
Retail property
Properties used exclusively to market and sell consumer goods and services.
Retail trade area
Also referred to as service area, is generally defined as the geographic or formal area from which a sustained patronage is attracted to support a retail center or establishment; the extent to which is determined by numerous factors including the site characteristics of the center or establishment, its accessibility, the presence or absence of physical barriers to movement, and general limitations imposed by driving time, congestion, and distance/separation.
Reversion value
A lump-sum cash benefit that an investor receives or expects to receive upon the sale of an investment.
Risk
The probability that actual cash flows from an investment will vary from the forecasted cash flows.