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Thomas D. Kearns
tkearns@olshanlaw.com

@TDKearns
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Acronyms, Abbreviation and Jargon in New York Commercial Real Estate

To help our junior lawyers we have gathered many acronyms, abbreviations and phrases that are commonly used in commercial real estate transactions in New York.  This list will help Olshan lawyers decipher the sentence, “We need to sign the NDA before they give us the LOI for the JV.”

ACRIS – Automated City Register Information System

AG – Attorney General

ALR – Assignment of Leases and Rents

ALTA – American Land Title Association

ALTA 9 – Title policy endorsement that insures against violations of CCRs

APR – Annual Percentage Rate

ARM – Adjustable Rate Mortgage

BLA – Building Loan Agreement (construction loan)

CAM – Common Area Maintenance charges (usually for shopping centers)

CAP EX – Capital Expenditures (to be distinguished from OP EX)

Carve Outs – the exceptions to the non-recourse provisions of loan documents, typically guaranteed under a non-recourse carve-out guaranty, a/k/a Bad Boy Guaranty

CCR – Conditions, Covenants, and Restrictions

CEMA – Consolidation, Extension and Modification Agreement

CFIUS – Committee on Foreign Investment in the U.S.

CMA – Cash Management Agreement

CO, COO or C of O – Certificate of Occupancy

CONFI – Confidentiality Agreement (a/k/a Non-Disclosure Agreement or NDA)

CRE – Commercial Real Estate

DBA – Doing Business As

DCR or DSCR or DSR – Debt Service Coverage Ratio

DD – Due Diligence (a/k/a due dili)

DOB – Department of Buildings

DOF – Department of Finance

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization (similar to NOI)

FADR – Floor Area Development Rights (a/k/a Air Rights)

FAR – Floor Area Ratio (zoning ratio)

FCRA – Fair Credit Reporting Act

FDIC – Federal Deposit Insurance Corporation

FEMA – Federal Emergency Management Agency

FHLMC – Freddie Mac (Federal Home Loan Mortgage Corporation) (a/k/a Freddie)

FIRPTA – Foreign Investment in Real Property Tax Act

FMV – Fair Market Value

GL – Ground Lease

GO DARK – the restriction on or right of a store tenant to close the store for maintenance or other reasons or to simply close while still paying rent

GOOD GUY – Good Guy Guaranty – guaranty of rent during tenant’s period of occupancy – typically terminates upon delivery of vacant possession

GP – General Partner (although “general partner” refers to the old limited partnership format, it’s still often used to refer to the Manager or Managing Member of an LLC)

HARD DEPOSIT – a deposit that is or becomes non-refundable. [Similar – “Go Hard” means to elect to proceed with transaction and put deposit at risk after diligence period expires.]

HOA – Homeowners Association

HUD – Department of Housing and Urban Development

HVAC – Heating, Ventilation and Air Conditioning

ICAP – Industrial & Commercial Abatement Program (property taxes)

I/O – Interest Only (Loan)

IRA – Individual Retirement Account

IRR – Internal Rate of Return

IRS – Internal Revenue Service

JV – Joint Venture (usually in the form of an LLC)

K – Contract

KYC – Know Your Customer (background check under money laundering and anti-crime rules)

LA – Loan Agreement

LC – Letter of Credit

LIBOR – London Interbank Offered Rate

LLC – Limited Liability Company

LLP – Limited Liability Partnership

LOI – Letter of Intent

LTV – Loan to Value

MIPA – Membership Interest Purchase Agreement (for the sale of LLC membership interests)

MLS – Multiple Listing Service

NDA – two meanings: Non-Disclosure (a/k/a Confidentiality) Agreement or Non-Disturbance Agreement (a/k/a “SNDA”)

NNN – Triple Net Lease

NOI - Net Operating Income (similar to EBITDA)

NON CON - Non Consolidation Opinion (for larger loans an opinion that this property will not be consolidated with other properties in a bankruptcy)

OFAC – Office of Foreign Assets Control

OP EX – Operating Expenses (to be distinguished from Cap Ex)

OP UNITS – Operating Partnership Units (typically issued by a REIT)

PG – Personal Guaranty

PMA – Property Management Agreement/ PM – Property Manager

POA – Power of Attorney

PREF – Preferred Return

PRO FORMA – draft title policy

PROMOTE – a return to the GP of the JV that is higher than a pro rata return on capital contributions intended to reward the GP for profits earned over a baseline IRR

PSA – Purchase and Sale Agreement

PUD – Planned Unit Development

Q1, Q2, Q3, Q4 – accounting period quarters

REA – Reciprocal Easement Agreement

REBNY – Real Estate Board of New York

REIT – Real Estate Investment Trust

REO – Real Estate Owned

ROFO – Right of First Offer

ROFR – Right of First Refusal

ROI – Return On Investment

SHOTGUN – a buy/sell provision in a JV under which the recipient of the exercise notice must elect to either purchase or sell at the price named in the notice

SNDA – Subordination and Non-Disturbance Agreement

SOFT DEPOSIT – a contract deposit that is refundable after diligence period

SPA – Stock Purchase Agreement or Sale-Purchase Agreement (with the latter more commonly referred to as a PSA)

SRO – Single Room Occupancy

TABLE A – List of optional ALTA survey requirements

TOE – Time of the Essence

UPREIT – Umbrella Partnership created by a REIT

UST – Underground Storage Tank

WATERFALL – the series of clauses in an LLC Agreement which control the flow of proceeds of the business

ZLDA – Zoning Lot Development Agreement

For additional jargon, see the 2009 Probate and Property Magazine article by Joshua Stein and  Obianuju A. Enendu at this link

Thanks to my colleagues Hyman Kindler and Vesna Naidoo-Chinsammy for their contributions and to Joshua Stein for the tip about his article and to Laurie Nelson, Andrew Baraff, Steve Hantz and David Rosenberg for their contributions.

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