Multifamily Asset Management Glossary
Plain-English definitions of the financial and operational terms that come up most in multifamily asset management.
Income & performance
Net Operating Income (NOI)
Effective gross income minus operating expenses, before debt service, capital expenditures, depreciation, and income taxes. The primary measure of operating cash generation and the figure most directly tied to value.
Effective Gross Income (EGI)
Gross potential rent less vacancy, loss to lease, concessions, and bad debt, plus other income such as fees and utility reimbursements. The property's true collected revenue.
Gross Potential Rent (GPR)
The total rent a property would collect if every unit were leased at market rent with no vacancy, concessions, or loss to lease.
Loss to Lease
The gap between market rent and the in-place rents actually signed. A large or growing figure means in-place rents are lagging the market.
Economic Occupancy
The percentage of gross potential rent actually collected, after vacancy, loss to lease, concessions, delinquency, and non-revenue units. A more honest measure than physical occupancy.
Physical Occupancy
The percentage of units physically occupied, regardless of whether rent is being collected.
Operations
Concessions
Discounts or incentives given to sign or renew a lease, such as free rent. Heavy concessions can mask weak leasing or mispriced rents.
Delinquency
Billed rent that has not been collected. Persistent delinquency erodes economic occupancy and signals collections or resident-quality issues.
Allowance for Doubtful Accounts (AFDA)
A reserve recognizing the portion of receivables unlikely to be collected, used to state expected collectible revenue realistically.
RUBS
Ratio Utility Billing System — recovering utility costs from residents by allocation (unit size, occupancy) rather than individual meters.
Down Unit
An apartment that cannot be leased and produces no rent because it is offline for repairs, renovation, casualty, or code issues. Distinct from an ordinary ready-to-lease vacancy. See managing down units.
Make-Ready
The work to prepare a vacated unit for the next resident — cleaning, paint, repairs. Make-ready speed directly affects leasing velocity.
Internet Listing Service (ILS)
Online marketplaces where rental listings are advertised. ILS coverage and listing quality drive qualified leasing traffic.
Finance & debt
Debt Service Coverage Ratio (DSCR)
NOI divided by debt service. Above 1.0, operations cover the debt payment; below 1.0, they do not.
Debt Yield
NOI divided by the loan amount, as a percentage. A lender risk measure independent of rate or amortization.
Capitalization Rate (Cap Rate)
NOI divided by value or price. Used to estimate value from income, where value ≈ NOI ÷ market cap rate.
CapEx vs. OpEx
Capital expenditures are investments in long-lived assets (roofs, renovations); operating expenses are recurring costs of running the property. Correct classification is essential to stating NOI accurately.
T12
Trailing twelve months of operating statements — a standard view for analyzing recent performance.
Workouts & distress
Forbearance
A lender's temporary agreement not to enforce its remedies, often pausing or reducing payments to bridge a temporary problem.
Loan Modification
A permanent change to a loan's terms — rate, amortization, maturity, or covenants — to fit current cash flow or market conditions.
A/B Note Structure
A restructure splitting a troubled loan into an A-note sized to current debt service and a B-note (hope note) for the remainder, deferred and repaid only on recovery. See loan workouts.
Deed in Lieu of Foreclosure
A negotiated transfer of title from borrower to lender to satisfy a defaulted loan instead of foreclosure — faster and cheaper, but title passes subject to junior liens. See deed in lieu vs. foreclosure.
Receivership
A court-supervised arrangement in which a neutral receiver takes control of and operates a property during a dispute or default, preserving collateral value while the legal process resolves.
Transactions
Lease Audit
A file-by-file review of resident leases against the rent roll to confirm rents, terms, deposits, concessions, and signatures are accurate and enforceable. See acquisition due diligence.
Rent Roll
A schedule of every unit with its resident, lease term, rent, and status. The foundational document for verifying income.
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