Glossary

Investment Structure

Indicates whether the project is an equity or debt investment offering.

Property Type

Indicates the different types of property (e.g. residential, office, hotel) that each project consists

Currency

Indicates the project’s currency of investment.

Distribution Frequency

Indicates the project’s dividend distribution (for equity) or interest payment (for debt) frequency (e.g. annually, semi-annually, quarterly).

Target IRR (%)

Indicates the target internal rate of return of a project provided by the real estate crowdfunding platform. The internal rate of return is a metric used to demonstrate a return profile, which is made up of the project’s dividend yield (rental income) and capital gains.

Estimate Holding Period

Indicates the expected investment period of a given project (typically 3-5 years).

Minimum Investment Amount

Indicates the minimum investment amount an investor would need to commit to a given project.

Purchase Price

The project’s gross purchase price.

Fractional Ownership

A method in which several unrelated parties can share in, and mitigate the risk of, ownership of a piece of real estate (includes but not limited to crowdfunding, peer-to-peer lending, and security token offering).

Crowdfunding

The practice of funding a project by raising small amounts of money from a large number of people.

Peer-to-Peer Lending (P2P)

The practice of lending money to businesses that match lenders with borrowers.

Security Token Offering (STO)

A crypto token that passes the Howey Test (a test created by the Supreme Court for determining whether certain transactions qualify as investment contracts) is deemed a security token. These usually derive their value from an external, tradable asset. Because the tokens are deemed a security, they are subject to federal securities and regulations.

Real Estate Investment Trust (REIT)

A vehicle allows individual investors to buy shares in commercial real estate portfolios that receive income from a variety of properties.

Open project

A project that can be worked on in real-time and with a defined deadline.

Closed Project

A project that is no longer seeking for funding.

Equity

A value attributable to the owners of a business.

Debt

A sum of money that is owed or due.

Residential

A type of property that is designed for people to live in, such as apartments & houses.

Commercial

A type of property that is designed for people to work at, such as offices.

Hospitality

A type of property that is designed for people to host guests, such as hotels & motels.

Retail

A type of property that is designed for the selling of goods to consumers, such as restaurants and shops.

Land

A property that is designated by fixed spatial boundaries.

Student Accommodation

A type of property that is designed to rent to students. It is also known as student housing.

Industrial

A type of property that is designed to industrial activities, such as warehousing, and manufacturing,

Medical

A type of property that is designed to lease to members or organizations within the healthcare community, such as hospitals.

Resort

A type of property that is frequented for holidays or recreation.

Re-gearing

the practice of renegotiating your lease terms during the course of the lease

Cash return

Cash return, also known as Cash-On-Cash or Cash yield, is a rate of return often used in real estate transactions that calculates the cash income earned on the cash invested in a property. It measures the annual return the investor made on the property in relation to the amount of mortgage paid during the same year. [Cash on cash return = (Annual pre-tax cash flow) / Total cash invested]

Return on Equity

Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders’ equity. Because shareholders’ equity is equal to a company’s assets minus its debt, ROE could be thought of as the return on net assets.ROE is considered a measure of how effectively management is using a company’s assets to create profits.

[Return on Equity = Average Shareholders’ Equity / Net Income]

Equity Multiple

A financial leverage ratio that measures the portion of company’s assets that are financed by stockholder’s equity. It is calculated by dividing a company’s total asset value by total net equity. [Equity multiplier = Total assets / Total stockholder’s equity]

Leverage

the debt portion within the capital stack. The ratio of a company’s loan capital (debt) to the value of its ordinary shares (equity)

Gross Asset Value

the total sum of value of a company owns.

Net Asset Value

the value of an entity’s assets minus the value of its liabilities.

Core

Asset Characteristics:
High quality
Limited capital needs
Stable/run-rate occupancy
Well managed
Passive strategy

Investment Characteristics:
Yield-oriented (CoC %)
Lower return target, e.g. >5% IRR
Longer-term investment, may or may not seek exit as liquidity transacted through platform’s secondary market.
Low-to-medium leverage.

Primary Return Driver
Stable net cashflow from tenancy profile & limited outgoings + capex.

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