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In Contract
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The moment in time when a buyer and a seller both sign a contract of sale.
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Implied capitalization rate (REIT ICR)
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Referring to Real Estate Investment Trusts, the ICR is calculated by dividing the net operating income by the sum of REIT's equity market capitalization and its total outstanding debt.
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Impounds
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A portion of the monthly mortgage payment that is placed in an [escrow] account and used to pay for hazard insurance, property taxes, and other legally-required expenses.
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Improvements
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Referring to leases, this term generally to improvements made inside a building, but may include any permanent structural developments, or outside improvements, such as sidewalk replacement, utilities upgrade, or façade resurfacing.
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Income property
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Property that is not occupied by the owner but is used to generate income.
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Income return
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The portion of the gain on an investment that is generated by income from operations. (As opposed to gain from change in market value, reinvested dividends, or other sources).
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Index
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A measurement used by lenders to determine changes to the interest rate charged on an adjustable rate mortgage. Commonly-used indexes are the Prime Rate table and the Treasury Bill value chart.
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Indexed Rate
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The sum of the published index plus a margin (lender’s interest).
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Indirect costs
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Development costs other than direct material and labor costs. Indirect costs include financing and engineering costs, administrative and managerial expenses, and taxes and fees.
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Inflation (1)
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The annual rate at which consumer prices increase.
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Inflation (2)
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A situation wherein the amount of currency in circulation exceeds the amount of goods & services available for purchase.
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Initial interest rate
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The original interest rate on an adjustable rate mortgage, which may be subject to adjustment due to market conditions and other factors.
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Initial public offering (IPO)
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The first time a private company offers securities for sale to the public.
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Initial rate cap
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Within the contract of an adjustable rate mortgage (see ARM), the initial rate cap is a specific limit for the maximum amount the interest rate may increase at the expiration of the initial interest rate.
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Initial rate duration
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Within the contract of an adjustable rate mortgage (see ARM), this is the specified time period during which the initial rate applies.
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Insurance
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Protection against a specific loss over a period of time, that is secured by the payment of a regularly scheduled premium.
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Insurance binder
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A temporary insurance arrangement, usually put in force until a permanent policy can be secured.
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Insured Mortgage
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A mortgage that is guaranteed by the Federal Housing Administration (FHA) or by private mortgage insurance (PMI).
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Interest
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The price paid for the use of someone else’s money.
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Interest-only loan
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The borrower pays only the interest that accrues on the loan balance each month. Because each payment goes toward interest, the outstanding balance of the loan does not decline with each payment.
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Interest paid over life of loan
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The total amount of interest paid over the duration of the loan.
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Interest Rate
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The amount charged by a lender to borrower for the use of borrowed money.
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Interest Rate Cap
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During the adjustment period of an ARM, the Interest Rate Cap is the maximum interest rate change allowed.
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Interest Rate Ceiling
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The highest interest rate a lender can charge for an adjustable rate mortgage.
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Interest Rate Floor
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The lowest interest rate a lender can charge for an adjustable rate mortgage.
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Interest-only strip
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A derivative security consisting of the interest portion of the underlying loan or security. May include all or part of the interest amount.
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Interim financing
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Also known as “bridge” or “swing” loans, interim financing is used by sellers to sustain solvency in the time between the sale of one house and the purchase of another. Most construction loans are a form of interim financing.
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Inventory
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Most often, brokers use the term “inventory” to mean the total available listings by their agency, without regard to type, size, condition, or price. For example, “Fillmore has the largest inventory in Brooklyn”. However, this term can be used to refer to almost anything – “commercial inventory” means only commercial properties, “lease inventory” can include commercial and residential properties available for lease, and so on.
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Investment manager
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An entity (person or organization) that assumes control over capital, invests that capital in assets, and provides asset management.
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Investment policy
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A document that specifies an investment manager’s goals and methods for investment and asset management. This policy typically contains: overall goals, core investment criteria and methods, specialized investment criteria and methods, as well as asset management guidelines.
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Investment property
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Any real estate property that actively generates income. Examples include apartment buildings,
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Investment strategy
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The investment parameters used by the manager in structuring the portfolio and selecting the real estate assets for a fund or account. This includes a description of the types, locations and sizes of properties to be considered, the ownership positions that will be used, and the stages of the investment lifecycle.
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Investment structures
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Unleveraged acquisitions, leveraged acquisitions, traditional debt, participating debt, convertible debt, triple-net leases and joint ventures
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Investment-grade CMBS
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Commercial mortgage-backed securities with ratings of "AAA," "AA," "A" or "BBB"
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Investor status
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In reporting to clients and consultants, all investors are divided into two categories: taxable and tax-exempt. The tax-exempt category includes all qualified pension and retirement accounts. The taxable category includes all other accounts under management, including off-shore capital.
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