Key terms and definitions for land development, site feasibility analysis, zoning, finance, and entitlements.
The ratio of net operating income to total debt service, used by lenders to assess a property's ability to cover its loan payments.
Total property revenue minus operating expenses, excluding debt service, depreciation, and capital expenditures.
The ratio of NOI to property value, used to estimate the rate of return on a real estate investment.
The ratio of a building's total floor area to the size of the lot, controlling development density.
The legal process of obtaining government approvals to develop a parcel, including zoning changes, variances, and permits.
A financial projection model that estimates a development project's revenues, costs, and returns over time.
The minimum distance a building must be set back from a property line, street, or other boundary as required by zoning.
A formal exception from zoning regulations granted by a local board, allowing development that doesn't strictly comply with the code.
A one-time charge levied by local government on new development to fund public infrastructure improvements necessitated by growth.
The rate at which available homes or units sell or lease in a specific market over a given time period.
The ratio of a project's stabilized NOI to its total development cost, measuring the developer's yield relative to what they spent to build.
The comprehensive investigation of a property before acquisition, covering physical, legal, environmental, financial, and regulatory aspects.
A legal right to use another person's land for a specific purpose, such as utility access or drainage.
The amount of tax per dollar of assessed property value, where one mill equals $1 per $1,000 of value.
The ratio of a loan amount to the appraised value of the property, used by lenders to assess risk.
A PUD allows mixed uses and flexible zoning in one master-planned project. Learn how PUDs work, their pros and cons, and how they differ from standard zoning.
The legal process of dividing a parcel of land into two or more lots for sale or development.
A zoning incentive that allows developers to build more units than normally permitted in exchange for providing affordable housing or other public benefits.
An ALTA/NSPS survey is the gold standard for commercial real estate closings. Learn what it covers, typical costs ($2K–$10K+), and when lenders require one.
A due diligence investigation that identifies potential environmental contamination on a property through records review and site inspection.
An engineering study of subsurface soil and rock conditions that informs foundation design and earthwork requirements.
A scaled drawing showing the proposed layout of buildings, parking, landscaping, utilities, and grading on a development parcel.
A discretionary approval that allows a specific land use not normally permitted in a zoning district, subject to conditions.
An additional layer of zoning regulations applied on top of base zoning to address specific concerns like historic preservation or environmental protection.
A legal document and map showing the division of land into lots, blocks, streets, and easements, recorded with the county.
A permit required for earthwork activities including excavation, fill, and site leveling to ensure proper drainage and erosion control.
The planning and engineering of systems to control runoff from developed sites, including detention, retention, and water quality treatment.
A field study that identifies the precise boundaries of jurisdictional wetlands on a property using soil, vegetation, and hydrology indicators.
An engineering analysis of how a proposed development will affect traffic operations on surrounding roads and intersections.
A private organization that manages common areas and enforces covenants, conditions, and restrictions (CC&Rs) in a planned community.
A ground lease separates land from building ownership for 50–99 years. Learn how they work, financial pros and cons, and key terms to negotiate.
A tax strategy that accelerates depreciation deductions by reclassifying building components into shorter-lived asset categories.
A tax-deferred exchange under IRC Section 1031 that allows investors to swap one investment property for another without recognizing capital gains.
The reasonably probable use of a property that is legally permissible, physically possible, financially feasible, and maximally productive.