Glossary
Private real estate terms.
The fund's definitive documents govern the meaning of investment terms.
- Equity multiple
- Total distributions plus remaining value divided by invested equity. It does not account for time.
- Internal rate of return (IRR)
- A time-sensitive annualized return calculation. It can be affected by assumptions and the timing of cash flows.
- Net asset value (NAV)
- An estimate of assets less liabilities at a point in time, based on the valuation policy described by the fund.
- Loan-to-value (LTV)
- Loan balance divided by the value attributed to the collateral. Value and position in the capital stack both matter.
- Bridge loan
- Shorter-duration financing often used to acquire, renovate, entitle, or stabilize real estate before a longer-term exit.
- Mezzanine debt
- Subordinated financing that generally sits behind senior debt in payment priority.
- Distribution
- Cash paid to investors. A distribution is not necessarily profit and may include return of capital.
- Capital stack
- The layers of debt and equity that fund a project, usually with different priority, economics, and risk.
- Lot delivery
- The process of taking entitled land through infrastructure and site work so finished lots can be delivered for vertical construction.
- Liquidity
- The ability to convert an investment to cash. Private fund interests generally have limited liquidity.
- Accredited investor
- A person or entity meeting criteria defined under federal securities rules. Some offerings require reasonable verification.