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Real Estate Financial Modeling Accelerator (Updated April 2024)

Prior to launching the Accelerator program, Michael and I fielded email after email requesting a more structured real estate financial modeling training program on the site. Over the years, we've covered hundreds of real estate modeling…

Schematic Design

The first formal stage of the design phase after the conceptual design period, where initial design concepts are re-evaluated and many early-stage design documents are produced such as early iterations of site plans, floor plans, sections, and…

Conceptual Design

A pre-design phase where a owner and A & E team work together to bring shape to the project and outline its function and form. The conceptual design promotes an open dialogue between the architect and the owner, with concept sketches often…

Contractor Controlled Insurance Program (CCIP)

OCIP (Owner Controlled Insurance Program) and CCIP (Contractor Controlled Insurance Program) are broad and all-encompassing insurance policies that usually cover, at a minimum, general liability insurance, worker’s compensation, and excess…

Owner Controlled Insurance Program (OCIP)

OCIP (Owner Controlled Insurance Program) and CCIP (Contractor Controlled Insurance Program) are broad and all-encompassing insurance policies that usually cover, at a minimum, general liability insurance, worker’s compensation, and excess…

Guaranteed Maximum Price (GMP)

A type of cost plus contract whereby the contractor is reimbursed for all construction related costs, plus a fixed fee. The agreed upon costs and fee are capped, transferring the risk of cost overruns to the contractor, whilst any savings resulting…

Cost Plus Contract

A contract whereby the contractor is reimbursed for all the construction related costs, in addition to an agreed upon percentage of such costs covering the contractor’s overhead and profit. These contracts are typically used when the scope…

Lump Sum Contract

A contract whereby the total price of an entire construction project is negotiated and agreed to between the General Contractor and the Owner regardless of what the actual price ends up being at the end of the project. This type of contract…

Project Buyout

The Project Buyout is the time when the owner of a development project selects the General Contractor (GC) who then, either together with the project owner or alone, goes through the process of selecting and hiring all the subcontractors (subs)…

Add Alternate

An additional item of work that is priced out by a consultant/subcontractor during the contract negotiation or bid process, but isn’t yet part of the scope of work. It is an item that an owner is considering adding to the consultant/subcontractor’s…

Floor Plate

A term commonly used in commercial real estate to refer to an entire floor of a building. The term is commonly used when discussing square footage and/or variations in size and shape of floors within a building. Example of how it can be used: There…

Car Stacker

A hydraulic machine used to vertically stack cars in order to maximize parking efficiency. This technology is increasingly being used in high-density urban areas where land costs and parking rates make implementing this economically feasib…

Offering Memorandum

A presentation and marketing document given to investors for their investment consideration summarizing a potential deal. The memorandum will typically highlight various aspects of the investment such as a detailed description of the property,…

Promote

A financial interest provided to the sponsor (investment manager) as an incentive to maximize performance. This is typically an outsized share of the profits, payable once the investors have received back their entire initial capital contributions…

Cold Shell

Any building/rentable area that consists only of a bare, unimproved shell i.e. no interior finishes, HVAC, plumbing, lighting, elevators etc.

Concessions

Also referred to as an "Inducement", any preferential financial treatment offered by one party to another in a real estate transaction. In the case of a lease agreement, a concession most often takes the form of free rent for a period of time…