Term
|
Definition
Residential
Single family houses, condominiums, cooperative apartments
Income Producing
Multifamily
Commercial
Office
Retail
Hotel/motel
Industrial/warehouse
Recreational
Institutional (special purpose)
Mixed Use Developments |
|
|
Term
|
Definition
Multifamily
Commercial
Office
Retail
Hotel/motel
Industrial/warehouse
Recreational
Institutional (special purpose) |
|
|
Term
|
Definition
| Single family houses, condominiums, cooperative apartments |
|
|
Term
|
Definition
retail on first floor and condos above; condos/ office above generates business for the retail below
Korea town has a lot of vertical retail because it’s more common in Korean cities to be dense and vertical– also true in Tokyo, etc… |
|
|
Term
| mobile homes (as property type) |
|
Definition
| and warehousing oppourtunity– develop something on the land sometime in the future and make money in the mean time |
|
|
Term
|
Definition
- Core or institutional real estate– class A, doesn’t need refurbished, historical
- 4 of them: Multi-family, commercial, office, industrial (double check these)
- NONE-core: recreational, parking lot, mobile home parks, self-storage facilities, aviation properties |
|
|
Term
| equillibrium market rental rate (Supply and demand) |
|
Definition
Vacancy Rate
Supply and Demand
Short run vs. long-run
There are different influences on supply and demand for different product types |
|
|
Term
| how does vacancy impact rental rate? |
|
Definition
| lower rental rate if vacancy rate increases |
|
|
Term
| rental market equilibrium (off s/d curve) |
|
Definition
| space between equilib occupancy and existing stock space is vacancy |
|
|
Term
| motivational factors for location/ user tenants |
|
Definition
increase sales and reduce operating costs
Increase sales
Business type where success requires a higher revenue stream and heavy pedestrian traffic
Reduce operating costs
Business type where success is based on a lower cost structure and large amount of land |
|
|
Term
|
Definition
| Business type where success is based on a lower cost structure and large amount of land |
|
|
Term
|
Definition
| Business type where success requires a higher revenue stream and heavy pedestrian traffic |
|
|
Term
| Industrial buuildings are all clustered together for LOCATIONAL reasons |
|
Definition
| Cold stoage often in vernon because has separate electric bill than LA, much cheaper |
|
|
Term
| diff locational preferences |
|
Definition
When in transit– what are the things you want to see or do
INCREASE SALES; which type of RE is most concerned with location in terms on increasing sales= RETAIL |
|
|
Term
|
Definition
3rd street Promenade, SM
Abbot Kinney, Venice
Michigan Avenue, Chicago
Rodeo Drive, Beverly Hills
Grove, West Side
Americana,
Fifth Avenue, NYC |
|
|
Term
|
Definition
Very crowded, dense, confined, vertical
High income demographics
GO EVEN A SMALL DISTANCE AWAY AND RENT WILL DROP DRAMATICALLY |
|
|
Term
| location/ user tenants (4 facts/ rules) |
|
Definition
Competition leads to the highest rents in the most profitable locations and land value
Locations will be dominated by clusters of users with similar revenue or operating expense structures
Locations that are most valued will lead to the greatest density
Some locations are competed for by firms that are most cost-sensitive |
|
|
Term
| location/ user tenants impact on land value |
|
Definition
Building must be located on land and remember location is the key
Use buildings value to then find land value– dependent |
|
|
Term
| most common retail clusters |
|
Definition
Office clusters
EXAMPLES IN LA
South Bay
Tri cities; pasadena, glendale, burbank
Long beach
Mid-wilshire
Downtown
All the freeways cross there/ feed in there
Industrial clusters
Where do you see them?
City of Industry
I.E.
Bell, commerce, vernon, maywood, huntington park
Office clusters
Westside/ SM/ Culver City
Wilshire and Ocean Park ($6 a foot)
Multi-family
Century City, Westwood, Wilshire
WESTSIDE |
|
|
Term
| leasing more effective than owning b/c; |
|
Definition
Space requirements
Owning is a heavy capital investment
Stay out of the “real estate business”
Maintain operating flexibility. It’s much easier to lease new space, or sub-lease excess space based on staffing levels than it is to buy or sell buildings.
Maintenance and repair
If not used, must dispose of excess space
Space requirements; growing company– succeed and grow rapidly or fail; little credit history; cant buy building and no capital to build their own
Not in financial position to own– burn rate
OWNING is capital intensive
Ventura capital has really high return expectations; its expensive capital; deploy into core business |
|
|
Term
| why companies lease and not own: |
|
Definition
Build to rent to someone or build a property to sell to them; do they want to buy it for themselves?
Argument in favor of leasing?
Space requirements; growing company– succeed and grow rapidly or fail; little credit history; cant buy building and no capital to build their own
Not in financial position to own– burn rate
OWNING is capital intensive
Ventura capital has really high return expectations; its expensive capital; deploy into core business
Maintenance and repair
Just want to pay rent and let landlord take care of it
MOST ALL businesses prefer to lease |
|
|
Term
| leasing leads to specialization |
|
Definition
This results in specialized real estate firms.
The exception is for specialized facilities or for headquarters facilities where there are business reasons to own instead of lease. |
|
|
Term
|
Definition
Outlook for national economy
Economic base of the area
Demand
Supply |
|
|
Term
|
Definition
| On account of tenant turnover, space is not always leased even in strong markets. |
|
|
Term
|
Definition
GO MACRO!
And then drill down, eventually
Have to figure out national economy before local
Who has an outlook on the US economy they would like to share with us?
Interest rates don’t appear to be going up; have put it off until March |
|
|
Term
| most expensive housing market? |
|
Definition
| LA > NY, SF due to lower income in LA |
|
|
Term
|
Definition
Lessor = Owner, Lessee = Tenant
Underwriting Tenants
Financial statements
Credit ratings
Analyst reports
Bank relationships
Existing obligations |
|
|
Term
|
Definition
Financial statements
Credit ratings
Analyst reports
Bank relationships
Existing obligations |
|
|
Term
| general content of a lease |
|
Definition
Parties, Dates, Length
Base rent
Deposits
Condition
Allowable uses
Restrictions on assignment or subletting
Use of common areas and facilities
Responsibility for maintenance and repair
Restrictions on alterations or improvements
Construction of any expansion by owner
Eminent domain and any consideration
Responsibility for payment of specific expenses by lessee and/or lessor
Insurance requirements
Lease renewal options
Estoppels |
|
|
Term
| general content of a lease (1/2) |
|
Definition
Parties, Dates, Length
Base rent
Deposits
Condition
Allowable uses
Restrictions on assignment or subletting
Use of common areas and facilities
Responsibility for maintenance and repair |
|
|
Term
| general content of a lease (2/2) |
|
Definition
Restrictions on alterations or improvements
Construction of any expansion by owner
Eminent domain and any consideration
Responsibility for payment of specific expenses by lessee and/or lessor
Insurance requirements
Lease renewal options
Estoppels |
|
|
Term
| lease income (types of rent?) |
|
Definition
Flat Rent
No rent change over lease term
Step Up Rents
Specified rent increases at specified times
Indexed Rents
Periodic rent adjustment-CPI Index
Percentage Lease
Rent partially based on sales
“Breakpoint” |
|
|
Term
|
Definition
Gross (full service) leases
Tenant pays rent only
Property owner pays all operating expenses
Modified (full service) lease
Direct “pass-throughs”
Non-operating expense “pass-throughs”
Leases with operating expense recoveries
Single net leases, Double net, Triple net
Common Area Maintenance (CAM) |
|
|
Term
| lease income/ leases/ expenses |
|
Definition
Flat Rent
No rent change over lease term
Step Up Rents
Specified rent increases at specified times
Indexed Rents
Periodic rent adjustment-CPI Index
Percentage Lease
Rent partially based on sales
“Breakpoint”
Gross (full service) leases
Tenant pays rent only
Property owner pays all operating expenses
Modified (full service) lease
Direct “pass-throughs”
Non-operating expense “pass-throughs”
Leases with operating expense recoveries
Single net leases, Double net, Triple net
Common Area Maintenance (CAM) |
|
|
Term
|
Definition
| No rent change over lease term |
|
|
Term
|
Definition
| Specified rent increases at specified times |
|
|
Term
|
Definition
Periodic rent adjustment-CPI Index
Percentage Lease
Rent partially based on sales
“Breakpoint” |
|
|
Term
|
Definition
Rent partially based on sales
“Breakpoint” |
|
|
Term
| Gross (full service) leases |
|
Definition
Tenant pays rent only
Property owner pays all operating expenses |
|
|
Term
| Modified (full service) lease |
|
Definition
Direct “pass-throughs”
Non-operating expense “pass-throughs” |
|
|
Term
| Leases with operating expense recoveries |
|
Definition
| Single net leases, Double net, Triple net |
|
|
Term
| Common Area Maintenance (CAM) |
|
Definition
|
|
Term
| pro forma cash flow statement |
|
Definition
Rental Income
+ Other Income
+ Recoveries
- Vacancy and Collection Losses
- Concessions
Effective Gross Income (EGI)
EGI
- Operating Expenses
- Capital Expenditures
Net Operating Income (“NOI”)
Depending on the analyst, capital expenditures may or may not be including in the calculation of net operating income. |
|
|
Term
| depending on analyst during pro forma cash flow statement |
|
Definition
| Depending on the analyst, capital expenditures may or may not be including in the calculation of net operating income. |
|
|
Term
|
Definition
premium/ dicounts
variable terms
Usable area- area you actually use
Load factor- 10-20% load factor means that is the amount of common area
area you use versus area you pay rent on
Rentable area– includes common areas and other areas of apartment you may not use |
|
|
Term
|
Definition
|
|
Term
|
Definition
10-20% load factor means that is the amount of common area
area you use versus area you pay rent on |
|
|
Term
|
Definition
| includes common areas and other areas of apartment you may not use |
|
|
Term
| industrial property leases |
|
Definition
Similar to office leases
More individualized for tenant
Term tends to be longer than office leases
Tend to be pass-through
Premiums & Discounts |
|
|
Term
|
Definition
Sales per Rentable Square Foot and Traffic Counts
Provisions on operations may include limits on other tenants
Anchor and In-Line Tenants
Rent Differences
Percentage rent lease
Breakpoint
Overage
Common Area Maintenance (CAM) |
|
|
Term
|
Definition
| Want to be in a mall w/ a lot of traffic– not coming for use of your food but traffic caused by retail use will drive them towards eating at your establishment |
|
|
Term
| Retail centers surrounded by offices |
|
Definition
Fig and 7th
Westfield in Westwood
Fashion Island |
|
|
Term
Nordstrom’s provisions that may limit other tenants?
“were the only department store”
“we like to co-tenant with this department store”
“we don’t like to co-tenant w/ this rival department store” |
|
Definition
“were the only department store”
“we like to co-tenant with this department store”
“we don’t like to co-tenant w/ this rival department store” |
|
|
Term
| GENRAL on retail landlords/ tenant mix |
|
Definition
| In retail landlord charges more money if able to put together tenant mix with a lot of traffic |
|
|
Term
|
Definition
Bloomingdales
Nordstrom’s
DEPARTMENT STORES |
|
|
Term
| entertainment based retail |
|
Definition
Americana
LA live
Wilshire and Westwood
3rd street promenade |
|
|
Term
|
Definition
Total control of management
Control tenant mix fully
Operating rules/ regulations (hours of operation)
The design and flow– fully congruent |
|
|
Term
| rent expense (anchor v. inline) |
|
Definition
Anchor pays less because want to draw them in and they create most foot traffic
In line is higher
REASONS
Responsible to bring in traffic, many expense to make that possible
If developer, need development finance, need to be 50% pre-leased; that 50% is usually your anchor tenants |
|
|
Term
| why anchor pay less rent than inline? |
|
Definition
responsible to bring in traffic, many expense to make that possible
If developer, need development finance, need to be 50% pre-leased; that 50% is usually your anchor tenants |
|
|
Term
|
Definition
= 10% * Gross Sales
10,000 BASE RENT = $20,000/ (Square with line through it)/mo
Greater of $20,000 or 10% * gross sales
What is the break point? = $20k/ month = 2,400,00/ yr |
|
|
Term
|
Definition
common area maintenance
most retail leases are triple net, meaning paid by landlord, then they are passed through to the tenants
Retail tenant in center; must factor in charges landlord is going to pass through
These charges are CAMS |
|
|
Term
| retail leases (gross sales/ sales taxes) |
|
Definition
| Tenants have to report gross sales and pay sales taxes on it; can lie to owner and FTB and try to avoid taxes; YOU WILL GET CAUGHT |
|
|
Term
|
Definition
Shorter Term
Impact of consumer protection laws
Gross Potential Rental Income
Full occupancy
Loss to Lease
The concept of loss to lease is that since the leases in residential real estate are so short, a landlord is always on the verge of catching up to whatever market is. The loss to lease shows what this differential is. |
|
|
Term
| Biggest difference between apartment and office, industrial, and retail? |
|
Definition
| They are B>C; which is business to consumer as opposed to B>B which is business to business |
|
|
Term
| Gross Potential Rental Income |
|
Definition
|
|
Term
|
Definition
| The concept of loss to lease is that since the leases in residential real estate are so short, a landlord is always on the verge of catching up to whatever market is. The loss to lease shows what this differential is. |
|
|
Term
|
Definition
| when Market Value is the most probable price given the following conditions |
|
|
Term
| valuation fundamentals (ch 10) |
|
Definition
Buyer and seller are typically motivated
Parties are well informed/well advised and acting in their best interest
Reasonable time in the market
Payment in cash or its equivalent
Traditional financing |
|
|
Term
| appraisal process (summary)(ch 10) |
|
Definition
The appraisal process is performed by appraisers and others seeking to establish value
Physical and legal identification
Identify property rights to be valued
Specify the purpose of the appraisal
Specify effective date of value estimate
Gather and analyze market data
Apply techniques to estimate value |
|
|
Term
| appraisal process (steps)(ch 10) |
|
Definition
Physical and legal identification
Identify property rights to be valued
Specify the purpose of the appraisal
Specify effective date of value estimate
Gather and analyze market data
Apply techniques to estimate value |
|
|
Term
| appraisal process (3 approaches) (ch 10) |
|
Definition
Sales Comparison Approach
Income Capitalization Approach
Cost Approach
For most of this textbook, we will focus on the income capitalization approach, but the other two have substantial validity also. |
|
|
Term
| sales comparison approach (ch 10) |
|
Definition
Use data from recently sold “comparables” to derive a “subject” market value
Adjust comparable sales prices for feature, age, and size differences, etc.
Lump sum adjustments and square foot adjustments
Subjective process |
|
|
Term
|
Definition
There are three methods for the income approach.
Gross Income Multipliers (“GIM”)
Direct Capitalization Method
Discount Present Value Method |
|
|
Term
| three methods for the income approach. (ch 10) |
|
Definition
Gross Income Multipliers (“GIM”)
Direct Capitalization Method
Discount Present Value Method |
|
|
Term
| 1st income approach; GIM (gross income multiplier) (ch 10) |
|
Definition
1st Income Method: Gross Income Multiplier (“GIM”)
Apply GIM to the subject property
Example 10-1: Recent sales of similar property
box on slide 10 7 |
|
|
Term
1st income approach; GIM (gross income multiplier)
Selecting the GIM from the comparables is an education opinion (ch 10) |
|
Definition
Which is most similar to the subject?
How should they be weighted?
If 6x is determined to be the GIM and the subject has gross income = $120,000;
Value Estimate = 6 x $120,000 = $720,000 |
|
|
Term
2nd income approach method; capitalization rate
*slides 9 up 13** get down!! (ch 10) |
|
Definition
2nd Income Method: Capitalization Rate
value = noi/r
Example 10- 2: Recent similar property sales
able slide 10 9
Capitalization Rate Range:
13.20% < R < 13.77%
The cap rate choice is an educated opinion of the appraiser
Which property is most similar to the subject?
Note: For any two properties that you compare, the higher the cap rate, the lower the value given the same amount of NOI.
slide 10 11 , idea continued
Considerations when determining R
Consider the comparables
Similarity to subject
Physical Attributes
Location
Lease Terms
Operating Efficiency
Consider the comparables
How is NOI determined?
Stabilized NOI
Nonrecurring capital outlays
Lump Sum
Averaged
Was NOI skewed by a one-time outlay?
Depending on the analyst, leasing commissions, tenant improvements, and recurring capital outlays may or may not be including in the calculation of net operating income. |
|
|
Term
| highest and best use (ch 10) |
|
Definition
which is the use that results in the highest residual land value.
Land prices are volatile relative to income producing real estate.
The land price is determined by its highest and best use, |
|
|
Term
| residual land value (highest/ best use) (ch 10) |
|
Definition
PV – Building Cost = Land Value
Step 1: Compute the present value of the estimated cash flows for all alternatives.
Step 2: Subtract building cost
Step 3: Select highest value among the alternatives |
|
|
Term
| steps in residual land value (ch 10) |
|
Definition
Step 1: Compute the present value of the estimated cash flows for all alternatives.
Step 2: Subtract building cost
Step 3: Select highest value among the alternatives
Step 1: Compute the present value of the estimated cash flows for all alternatives.
Step 2: Subtract building cost
Step 3: Select highest value among the alternatives
PV – Building Cost = Land Value |
|
|
Term
| (Valuation Fundamentals) Reconciliation of Value Estimates (ch 10) |
|
Definition
| The sales comparison and income approaches should yield similar value estimates. |
|
|
Term
(Valuation Fundamentals) Changing Market Conditions and “Going in” Cap Rates
(ch 10) |
|
Definition
Supply & demand
Capital markets
Capital markets & spatial market changes |
|
|
Term
| Valuation Fundamentals) (ch 10) |
|
Definition
Reconciliation of Value Estimates
The sales comparison and income approaches should yield similar value estimates.
Changing Market Conditions and “Going in” Cap Rates
Supply & demand
Capital markets
Capital markets & spatial market changes |
|
|
Term
| cost approach (steps) (ch 10) |
|
Definition
Estimate the construction cost if new
Account for physical deterioration, functional obsolescence, and/or external obsolescence
Add land cost
Same procedure as was discussed in Chapter 7 |
|
|
Term
| cost approach (rationale) (ch 10) |
|
Definition
| The rationale is that no informed buyer would pay more for a property than it would cost to build a new one. This assumes, of course, that they took the time to construct a new asset into account, and the relative risks of ground up development. |
|
|
Term
| cost approach (when often used/ example) (ch 10) |
|
Definition
| The cost approach is often used for real estate assets that do not have an efficient market for tenants to lease space. A common example would be heavy manufacturing facilities; there is not a deep or broad market in automobile manufacturing facilities. |
|
|
Term
| financing project development (ch 11) |
|
Definition
Developer Challenges
National and local economies
Competition among developers
Changes in tenant preferences
Project Development
Finance land acquisition with intent of developing it and selling it
Development is impacted by the regulatory environment
Permitting
Application
Site
Location
Preliminary Design
Zoning
If in compliance, then permitted
If not in compliance, then appeals process
City planning department input
Developer Phases
Land acquisition
Construction
Completion and occupancy
Management
Sale
Economic success and value creation |
|
|
Term
| Developer Challenges (financing project development) (ch 11) |
|
Definition
National and local economies
Competition among developers
Changes in tenant preferences |
|
|
Term
| Project Development (financing project development) (ch 11) |
|
Definition
Finance land acquisition with intent of developing it and selling it
Development is impacted by the regulatory environment |
|
|
Term
| Permitting (financing project development) (ch 11) |
|
Definition
Application
Site
Location
Preliminary Design
Zoning
If in compliance, then permitted
If not in compliance, then appeals process
City planning department input |
|
|
Term
| Application (financing project development) (ch 11) |
|
Definition
Site
Location
Preliminary Design |
|
|
Term
| Zoning (financing project development) (ch 11) |
|
Definition
If in compliance, then permitted
If not in compliance, then appeals process
City planning department input |
|
|
Term
| Developer Phases (financing project development) (ch 11) |
|
Definition
Land acquisition
Construction
Completion and occupancy
Management
Sale |
|
|
Term
| Economic success and value creation (financing project (ch 11)development) |
|
Definition
|
|
Term
| phases of RE project development risk (ch 11) |
|
Definition
Phase 1; land acq
phase 2; construction
phase 3; completion/ occupancy
phase 4; management
phase five; sale
risk;
a; greater than normal predevelopment leasing, completion ahead of schedule
b; normal predevelopment leasing, completion on schedule
c; lower than normal predevelopment leasing, completion behind schedule |
|
|
Term
| developer business strategies (ch 11) |
|
Definition
Develop, own, manage, and lease projects for many years
Leasing and management are major components of the business model
Develop, own, lease-up to normal occupancy, then sell
Buyers could be insurance companies, syndicates, etc.
Sometimes continue to manage the property after sale
Develop land and buildings in a master-planned development
Business parks and industrial parks
Some “build to suit” for a single tenant
Some developers specialize in specific development phases
Most developers will consider a serious offer to purchase at any time |
|
|
Term
| room 4 local developers (a strategy) (ch 11) |
|
Definition
| paper developers; buy project, use local market knowledge/ political capabilities, create value w/o putting a shovel into the ground |
|
|
Term
| risk/ feasibility (ch 11) |
|
Definition
Risk begins with acquisition
Seasoned Property
Leasing Prior to Completion
Demand Factors
Vacancy rates, rent levels, predevelopment leasing commitments
Post-development competition
What do end users want?
Project Risks
Site Location
Value increases with tenant perception
More valuable sites result in higher-quality developments
Density increases with value perception
Specific Component Risk
How design features and amenities are valued by potential tenants
Uncertainty about how quantity and quality of services should be packaged |
|
|
Term
| Demand Factors (risk/ feasibility) (ch 11) |
|
Definition
Vacancy rates, rent levels, predevelopment leasing commitments
Post-development competition
What do end users want? |
|
|
Term
| (risk/ feasibility) project risks (ch 11) |
|
Definition
Site Location
Value increases with tenant perception
More valuable sites result in higher-quality developments
Density increases with value perception |
|
|
Term
| Specific Component Risk (risk/ feasibility) (ch 11) |
|
Definition
How design features and amenities are valued by potential tenants
Uncertainty about how quantity and quality of services should be packaged |
|
|
Term
| project development financing (ch 11) |
|
Definition
Equity investment
Developer
Partnership
Construction (Interim) loan
Appraised value of completed development
Hard costs
Materials and labor
Soft costs
Planning, leasing and management costs
Loan Structures
Short-term financing if the intent is to sell the property after completion and lease-up
Permanent loan and construction loan if the developer retains ownership as part of their business model
Construction financing followed by extended financing (a “mini-perm”) if the developer might own the property for a short while
Complications
In multi-loan financing, a permanent loan must be in place first.
If a sale is planned, market conditions may require a committed buyer in place.
Excess speculative and open-ended construction lending may lead to overbuilding. |
|
|
Term
| Equity investment (project development financing) (ch 11) |
|
Definition
|
|
Term
| Construction (Interim) loan (project development financing) (ch 11) |
|
Definition
Appraised value of completed development
Hard costs
Materials and labor
Soft costs
Planning, leasing and management costs |
|
|
Term
Hard costs (project development financing)
(ch 11) |
|
Definition
|
|
Term
| Soft costs (project development financing) (ch 11) |
|
Definition
| Planning, leasing and management costs |
|
|
Term
| Loan Structures (project development financing) (ch 11) |
|
Definition
Short-term financing if the intent is to sell the property after completion and lease-up
Permanent loan and construction loan if the developer retains ownership as part of their business model
Construction financing followed by extended financing (a “mini-perm”) if the developer might own the property for a short while |
|
|
Term
| Complications (project development financing) (ch 11) |
|
Definition
In multi-loan financing, a permanent loan must be in place first.
If a sale is planned, market conditions may require a committed buyer in place.
Excess speculative and open-ended construction lending may lead to overbuilding. |
|
|
Term
| lender requirements (ch 11) |
|
Definition
Loan submission information
Detailed description of development and market analysis
Requirements become complicated when multiple lenders are needed
Permanent commitment
Binding agreement between developer and permanent lender
Permanent lender or “take out” commitment “takes out” the construction lender
Standby commitments
Binding agreement, but low expectation of being used
Used when:
Developer does not want to pay fees for a permanent loan
Expectation of securing a better permanent loan later
Plans to sell the project and permanent loan is not needed
Permanent lender common contingencies
Time limit to acquire a construction loan
Completion date for construction
Minimum leasing requirements and approval of main leases
Gap financing provision
Expiration date
Approval of design and material changes
Construction or Interim Loan
Usually local lenders who
Know the local market
Monitor construction progress
Disburse funds as phases are completed
Mini-perm loan
Monthly draw method
Work is verified by architect or engineer
Floating interest rate
Permanent Loan Closing
Lender confirms that contingencies are met
Nonrecourse Clause
Restrict lender’s claim in default
Increase emphasis on property quality
Credit enhancements |
|
|
Term
| (lender requirements) Loan submission information (ch 11) |
|
Definition
| Detailed description of development and market analysis |
|
|
Term
(lender requirements) Requirements become complicated when multiple lenders are needed
(ch 11) |
|
Definition
Permanent commitment
Binding agreement between developer and permanent lender
Permanent lender or “take out” commitment “takes out” the construction lender |
|
|
Term
| Standby commitments (lender requirements) (ch 11) |
|
Definition
Binding agreement, but low expectation of being used
Used when:
Developer does not want to pay fees for a permanent loan
Expectation of securing a better permanent loan later
Plans to sell the project and permanent loan is not needed |
|
|
Term
| Permanent lender common contingencies (lender requirements) (ch 11) |
|
Definition
Time limit to acquire a construction loan
Completion date for construction
Minimum leasing requirements and approval of main leases
Gap financing provision
Expiration date
Approval of design and material changes |
|
|
Term
| Construction or Interim Loan (lender requirements) (ch 11) |
|
Definition
Usually local lenders who
Know the local market
Monitor construction progress
Disburse funds as phases are completed |
|
|
Term
Mini-perm loan (lender requirements)
(ch 11) |
|
Definition
|
|
Term
| Monthly draw method (lender requirements) (ch 11) |
|
Definition
| Work is verified by architect or engineer |
|
|
Term
| Floating interest rate (lender requirements) (ch 11) |
|
Definition
|
|
Term
| Permanent Loan Closing (lender requirements) (ch 11) |
|
Definition
Lender confirms that contingencies are met
Nonrecourse Clause
Restrict lender’s claim in default
Increase emphasis on property quality
Credit enhancements |
|
|
Term
|
Definition
Cost per square foot of gross building area
Compare with comparable property
Loans to cover improvement costs only
Generally, there is some level of equity investment made by the developer. 20% is used in the book and is reasonable.
Holdbacks
Lender holdbacks prevent developers from drawing down funds at a faster rate than they pay to contractors |
|
|
Term
| holdbacks (project costs) (ch 11) |
|
Definition
| Lender holdbacks prevent developers from drawing down funds at a faster rate than they pay to contractors |
|
|
Term
|
Definition
Before-Tax Cash Flows and After-Tax Cash Flows
Net Present Value
Internal Rate of Return
Sensitivity Analysis
Feasibility Analysis |
|
|
Term
| duplex defined (guest development) |
|
Definition
Multi-Families
Mirrored Design
Firewall Separation
Separate Utilities
Start of Residential Density
Efficient Use of Land
picture on slide 2 of development (guest) |
|
|
Term
| four plex defined (guest development) |
|
Definition
Owned or Rented
HOA Required if Owned
Common Walls
Efficiency of Design
picture on slide 3 of development (guest) |
|
|
Term
| multi family design (guest development) |
|
Definition
Parking Requirements drive Maximum Units
Parking Loads
Floor plans are Universal or Typical
Building Systems line up vertically:
Stacking Bathrooms
Elevator Shafts
Stairwell Corridors
Townhouse Style Design
Community Under Roof |
|
|
Term
| (one story climb law) 2ndary corollary to the one story climb law (guest development) |
|
Definition
| In a three-story town house, the garage entrance, and hence the kitchen, where one unloads the groceries from the car, should be at the second level, for the same reason as In the First Corollary. |
|
|
Term
| (one story climb law) 4th corollary 2 the one story climb law (guest development) |
|
Definition
| Multiple-family housing-apartments and condominiums-that are three stories or taller must have an elevator. |
|
|
Term
| (one story climb law) 6th corollary 2 the one story climb law (guest development) |
|
Definition
The world moves, in residential construction, at three stories. Residential structures either have to be less than three stories above the main entrance, in order for you to build them without elevators, or they have to be high-rise.
Once you start building a residential structure of concrete and steel to accommodate an elevator, your costs kick into so much higher an orbit that you have to build vastly more dwelling units per acre in order to make any money. |
|
|
Term
| (one story climb law) (guest development) |
|
Definition
|
|
Term
| (one story climb law) (guest development) |
|
Definition
|
|
Term
| diff condo/ apartments (guest development) |
|
Definition
Main Issue is Individual Ownership
Visibility vs. Privacy
Home Ownership Association vs. Property Manager
Individual vs. Building Systems
Your Unit Issues/Problems are all Yours
Condo requires Separate Utility Metering
Acoustical Separation
Capital Reserves
Monthly HOA Fees |
|
|
Term
| sims condo/ apartments (guest development) |
|
Definition
Exterior Appearances can be similar or same
Parking Driven
Features/Attractions
Water features
Swimming Pools
Spa
Water Fountains
Workout Gym
Clubhouse |
|
|
Term
| condo development (guest development) |
|
Definition
Location is not as important if you property has quality and uniqueness.
Wrap Insurance Policy
10-Year Construction Warranty
California SB-800 “Right to Repair” Law (2002)
Covenants, Conditions and Restrictions (CC&Rs)
Holding Costs will kill your project
Low Income Housing Requirements
Developer Geoffrey H. Palmer (Game Changer)
Density Bonus Units (SB-1818)
Homeowner’s Associations (HOA)
HOA Budgets
Common Area Maintenance (CAM)
Capital Expenditures (CapEx)
HVAC
Roofing
Elevator
Common Area
Swimming Pool
Gym
Playground |
|
|
Term
|
Definition
Homeowners Association
An Organization of the Homeowners in a particular Subdivision, Planned Unit Development, or Condominium: Generally for the purpose of enforcing Deed Restrictions or managing the Common elements of the Development.
Example: HOA Fees are monthly subsidizes to offset the cost of Common Area Routine Maintenance, Trash Removal, Deferred Maintenance and Capital Expenditures.
Example: Playa Vista Development |
|
|
Term
| residential markte analysis (guest development) |
|
Definition
A market analysis studies the attractiveness and the dynamics of a specific proposed Project within a certain market area. Through all of these analyses the strengths, weaknesses, opportunities and threats (SWOT) of a company can be identified.
As Developers we want to know the Supply and Demand of our Market Area to determine what quantity, quality, size and unit mix of multifamily units that would work ideally for a certain location.
This is money well spent! |
|
|
Term
| (condo development) Capex (guest development) |
|
Definition
capital expenditures
HVAC
Roofing
Elevator
Common Area
Swimming Pool
Gym
Playground |
|
|
Term
| condo conversion (from existing apartment units) (guest development) |
|
Definition
Conversions from Existing Apartment Units
Condo Quality Finishes & Appliances
Change of Use Permit
Tenant Notifications
Acoustical Report
Utility Metering Inspection
Final Condo Map |
|
|
Term
| apartment development (guest development) |
|
Definition
Location is more important than Condominium
Tenants turnover more than Condo Owners
Signage is important to attract new Tenants
Property Management is very important
Rent Collection is Key
Section 8 Housing – Financed by the U.S. Dept. Housing and Urban Development (HUD)
Rent Multiplier or CAP Rate
Valuation = NOI times CAP Rate
Durable Materials, Purchased in Bulk |
|
|
Term
| apartment financial issues (guest development) |
|
Definition
Maximum Potential Rents
Vacancy Rates
Rent Concessions
Delinquent Rent
Normal Wear & Tear
Other Income – Late Charges & Laundry Machines
Cash Flow is King
Deferred Maintenance
Tenant Turnover
Marketing |
|
|
Term
| vacancy rate (apartment financial issues) (guest development) |
|
Definition
| The Percentage of all units or space that is unoccupied or not rented. On a Pro-Forma income statement a projected vacancy rate is used to estimate the vacancy allowance, which is deducted from potential Gross Income to derive Effective Gross Income. |
|
|
Term
| Property Revenue (guest development) |
|
Definition
| slide 19 of mixed use development (guest) |
|
|
Term
| apartment fixed costs (guest development) |
|
Definition
fixed costs are typically 30 to 3five percent
Electricity
Natural Gas
Water & Sewer
Trash Removal
Cable TV
Phone
Pool Service
Landscaping
Insurance
Legal Issues
Property Taxes
Management Fees
Property Marketing
Local Advertizing |
|
|
Term
| apartment investing (guest development) |
|
Definition
| The Goal is to create a consistent Revenue Stream and Wealth through Appreciation and Cash Flow. Creation of an Investment Portfolio. |
|
|
Term
| cash flow = king (guest development) |
|
Definition
Monthly Cash Flow is what is left over at the end of the month after ALL liabilities are paid off.
This can be a negative value.
RENTAL REVENUES
Minus ALL EXPENSES
= CASH FLOW |
|
|
Term
| sensitivity analysis (guest development) |
|
Definition
| A Technique of Investment Analysis whereby different values of certain key variables are tested so see how sensitive investment results are to possibly change in assumptions. It is a method of evaluating the Riskiness of a Real Estate Investment. |
|
|
Term
| apartment valuation (guest development) |
|
Definition
TIMES 10 VALUE CALCULATION
Yearly Income $350,000
Yearly Expenses (not mortgage) $120,000
Net Operating Income (NOI) $230,000
NOI times 10 = Approx. Value $2,300,000
CAP Rate is the Return you expect to get for your Investment.
CASH on CASH Return measures the annual return on your property in relation to your Down Payment.
DEBT COVERAGE RATIO tells you how many times your cash flow covers your mortgage. |
|
|
Term
| (apartment valuation) cap rate (guest development) |
|
Definition
| he Return you expect to get for your Investment. |
|
|
Term
| (apartment valuation) cash on cash return (guest development) |
|
Definition
| measures the annual return on your property in relation to your Down Payment. |
|
|
Term
| (apartment valuation) debt coverage ratio (guest development) |
|
Definition
| tells you how many times your cash flow covers your mortgage. |
|
|
Term
| operating lease (guest development) |
|
Definition
A Contract in which, for a payment called Rent, the one entitled to the possession of real property (Lessor) transfers those rights to another (Lessee) for a specific period of time.
SUBLEASE: A Lease from a Lessee to another Lessee |
|
|
Term
| apartment types (guest development) |
|
Definition
A = Built in the Last 10 Years
White Collar Tenants
B = Built in the Last 20-30 Years
Both White & Blue Collar Tenants
C = Built in the Last 30-40 Years
Blue Collar & Section 8 Tenants
D = Built over 40 Years ago
Drug Dealers live here |
|
|
Term
| 3 main objectives of apartment investing (guest development) |
|
Definition
1) Put as little Cash in the deal as possible.
2) Get back what you invested as soon as possible.
a) Cash on Cash Return
b) Refinance Property
3) Get the Largest amount of Appreciation in the Shortest amount of time. |
|
|
Term
|
Definition
Household Size
Age of Decision Makers
Household Income
Spending Patterns
Competition within Trade Area
Local Price of Goods & Services
Business Acumen of the Retailers |
|
|
Term
| why do you go/ shop there? |
|
Definition
Sense of Convenience
Convenience of Access
Ease of Parking
Sense of Security
Need for High Visibility
Importance of Signage
Retail loves Intersections |
|
|
Term
| retail development issues |
|
Definition
Risk / Reward
Perception of Risk
Importance of Pre-Leasing to Lenders
Local Government need your sales tax revenue.
Retail – the last component of an efficient product distribution system
Subject Property vs. Comparables |
|
|
Term
| high risk of retail development |
|
Definition
Location
Time Constraints
CAP Rate Changes
User Demand Changes
Dead Malls
Rent Demand Changes
Cost of Capital
Global Events
Online E-Commerce |
|
|
Term
| retail shopping locational attributes |
|
Definition
Gross Leasable Area (GLA)
Visibility
Accessibility
Proximity
Parking |
|
|
Term
| shopping nonlocational attributes |
|
Definition
Quality
Pricing
Service
Security
Variety |
|
|
Term
|
Definition
Who is your Consumer?
Who is your Competition?
What is the Current Trend?
Know your future clients.
Market Analysis
Local Demographics
Who makes the Buying Decisions? |
|
|
Term
|
Definition
Average Household Size
Housing Units
Median Household Income
Median Home Value
Per Capital Income
Median Age
Households by Income
Owner Occupied Households by Value
Total Population
Population by Age
Population by Gender
Population by Race/Ethnicity
Population by School Enrollment
Population by Employment Status
Population by Education Level
Total Households |
|
|
Term
|
Definition
Market Trade Area
Regional Demographics
Project Timeline
Construction Costs
Construction Financing
Site Location
Anchor Selection
Pad Tenants
Tenant Mix
Layout Design
Parking Requirements
Landscaping
Environmental & Soils
Projected Profit
Exit Strategies
Conclusion |
|
|
Term
|
Definition
Who else is out there? Where? How Close?
Market Trade Areas
Primary Trade Area
Secondary Trade Area
Revenue Per SF per Month or Year
Property Rent Roll
Traffic Counts |
|
|
Term
|
Definition
HOW MANY CUSTOMERS MUST LIVE WITHIN A FIFTEEN-MINUTE DRIVE OF A MALL FOR IT TO BE SUCCESSFUL?
A Quarter of a Million.
THE NUMBER OF PEDESTRIANS PER HOUR AT MIDDAY REQUIRED TO MAKE AN URBAN CENTER WORK AND BE LIVELY?
One Thousand. |
|
|
Term
| retail market is responding to... |
|
Definition
Consumer Preferences
Governmental Policy
Tenant Innovation
Market Trends
Internet Changes
Technology |
|
|
Term
| your consumer keeps changing.... (what changes?) |
|
Definition
More Disposable Income
Less Time to Spend it
Desire for Something New
Use of Technology – Online Shopping
Convenience More and More of a Driving Force
Cultural shifts affecting Consumer Attitudes |
|
|
Term
| types of retail facilities |
|
Definition
|
|
Term
| types of retail facilities **** add slides for each |
|
Definition
Anchored Retail Pad Tenants
Power Center (Big Box) – Costco, IKEA
Factory Outlets - Wholesalers
Urban Village (Mixed-Use)
Festival Centers – Entertainment Retail, Tourists
Lifestyle Centers / Town Centers
Promotional Centers – Ross, Marshals
Renaissance Retail – Creating a Fake Main Street, Facade
Neighborhood Shopping Center
Strip Malls – Near Highway, Street
Corner Center – Mini Malls
Ground Leases – You Rent the Dirt |
|
|
Term
| urban village (mixed use) |
|
Definition
*think USC village* (mixed use)
An Urban Village is an urban development typically characterized by medium-density housing, mixed use zoning, good public transit and an emphasis on pedestrianization and public space. |
|
|
Term
|
Definition
| like where Ralphs is in westlake, based around grocery store it seems w/ some terrtiary, smaller shopping surrounding |
|
|
Term
|
Definition
what it sounds like; strip of small tenants; about 4 to 10 total
slide 21 (guest retail) |
|
|
Term
|
Definition
Prime Locations with High Visibility
Replaced the 2,000 closed Gas Stations in the 1970’s
Parking Requirements determines Retail Space
Huge Environmental Clean Up Issues and Costs
slide 23 (guest retail) |
|
|
Term
|
Definition
The Importance of Anchor Selection
Anchor Tenants – Department Stores (Economic Health of Corporation)
National Tenants vs. Mom & Pops
Correct Tenant Mix
Importance of Pre-Leasing to Lenders
Conflicting Products and/or Services
Leasing Commissions
slide 2five (guest retail) |
|
|
Term
|
Definition
THE FARTHEST DISTANCE AN AMERICAN WILL WILLINGLY WALK BEFORE GETTING INTO A CAR:
Six Hundred Feet.
(The length of two football fields.)
WHYTE'S LAW OF THE NUMBER OF BLOCKS AN AMERICAN WILL WALK IN MOST DOWNTOWNS:
Three, maybe four. In New York City, Five.
WHY ONE-STORY MALLS ARE OBSOLETE IN POPULAR LOCATIONS?
If the mall had enough shops to meet demand put upon it; it would be viewed by customers as too sprawling to walk. (Also, the land would be too expensive to build on at that low a density.)
HOW MANY STORIES UP OR DOWN AN AMERICAN WILL USE THE STAIRS?
One. Frequently zero.
FIRST COROLLARY TO THE ONE-STORY-CLIMB LAW:
In a three-level mall, the main entrance should be at the second level, from which it will only be one story up or down to get to the other levels. Otherwise, people may never go to the farthest level. |
|
|
Term
| rules of thumb for retail site planning |
|
Definition
Lot Coverage - 25% of 3:1 Land to Building
Standard Parking Spaces – 9’ x 18’
Parking Site Allowances – 350-400 SF/space
Typical Pad Site – 175’ x 175’ depending
Depth of Front Walk – 10’ min to 15’ max
Shops Signage – 2’ high, 66 to 75% frontage
Delivery Truck Turn-around 110’ to 120’ |
|
|
Term
|
Definition
| Articles placed in Rental Buildings by the Tenant to help carry out Trade or Business. The Tenant can remove the Fixtures before the exploration of the Lease, but if the Tenant fails to do so shortly after the lease expires, the Fixtures become the landlord’s property. |
|
|
Term
|
Definition
Bar Stools, Neon Signs
Stoves and Refrigerators
Decorative or Functional Light Fixtures |
|
|
Term
|
Definition
is—in a broad sense—any urban, suburban or village development, or even a single building, that blends a combination of residential, commercial, cultural, institutional, or industrial uses, where those functions are physically and functionally integrated, and that provides pedestrian connections.
slide 33 of (guess retail) |
|
|
Term
| mixed use development (features/ examples/ attributes) |
|
Definition
Retail/Housing
Retail/Office
Entertainment/Office
Compatibility of Uses
Vertical Stacking Issues
Vertical Subdivisions
Separation of Entry / Parking
LA Live (Downtown LA)
Figueroa Corridor
Business Improvement District (BID) |
|
|
Term
| mixed use development examples |
|
Definition
LA Live (Downtown LA)
Figueroa Corridor
Business Improvement District (BID) |
|
|
Term
|
Definition
Hours of Operation
Hours of Material, Supply and Shipment Delivery
Security Issues – Women Must feel safe to come to your store
Mail Delivery
Garbage collection
Holiday Events |
|
|
Term
|
Definition
Types of Leases, Triple Net (NNN)
Tenant Pays ALL, Rent, Insurance
Terms 5, 10, 15 years
Lease Terms
Annual Rental Bumps
Credit History
Business History |
|
|
Term
|
Definition
Heavy Tenant Improvement
Point of Sale (POS) Systems
Bar Equipment
Refrigeration
Kitchen Equipment
Dept. of Health
Ease of Parking |
|
|
Term
| kitchen/ back of house 30percent |
|
Definition
Food storage
Cold storage
Wine Storage
Locked Alcohol Storage
Food Prep Area
Kitchen Equipment
Grease Interceptor
Employee Lounge |
|
|
Term
| THE FARTHEST DISTANCE AN AMERICAN WILL WILLINGLY WALK BEFORE GETTING INTO A CAR: (RETAIL SITE PLANNING) |
|
Definition
Six Hundred Feet.
(The length of two football fields.) |
|
|
Term
| WHYTE'S LAW OF THE NUMBER OF BLOCKS AN AMERICAN WILL WALK IN MOST DOWNTOWNS: (RETAIL SITE PLANNING) |
|
Definition
| Three, maybe four. In New York City, Five. |
|
|
Term
| WHY ONE-STORY MALLS ARE OBSOLETE IN POPULAR LOCATIONS? (RETAIL SITE PLANNING) |
|
Definition
| If the mall had enough shops to meet demand put upon it; it would be viewed by customers as too sprawling to walk. (Also, the land would be too expensive to build on at that low a density.) |
|
|
Term
| HOW MANY STORIES UP OR DOWN AN AMERICAN WILL USE THE STAIRS? (RETAIL SITE PLANNING) |
|
Definition
|
|
Term
| FIRST COROLLARY TO THE ONE-STORY-CLIMB LAW: (RETAIL SITE PLANNING) |
|
Definition
| In a three-level mall, the main entrance should be at the second level, from which it will only be one story up or down to get to the other levels. Otherwise, people may never go to the farthest level. |
|
|
Term
| tried to “sound the alarm” (HW 2), names of alarmists |
|
Definition
| Roubini, Kronthal, Rodriguez, Paulson, Russo |
|
|
Term
|
Definition
| the Chairman of Roubini Economics. Beginning in August 2006, Roubini commented that dropping house prices could be more than enough to cause a recession, and, also, that month he commented that sub-prime lending institutions might act as the “canary” signaling an ugly housing bust. His warnings went silent due to his lack of adequate influence through out the mid 2000s (primarily due to skepticism surrounding his theories). |
|
|
Term
|
Definition
| Head of Merrill’s mortgage operation, had doubts the US’ subprime mortgages and worked to keep his company from purchasing a subprime originator. Thanks to his pleading and work, Merrill owned less than a few billion dollars worth of sub-prime CDO’s. However due to the intense pressure he was under, he was relieved of his mortgage operation duties at Merrill. |
|
|
Term
|
Definition
| apart of the First Pacific Advisors and manager of the New Income Fund. In a memo to the investors in the early 2000s, Rodrigues wrote that he was taking a buyers strike because he disliked the risk associated in purchasing Fannie and Freddie unaudited obligations. Zero of his investors were overly impacted due to the fact that their CMO’s had full backing from the federal government. |
|
|
Term
|
Definition
| hedge fund manager for Paulson & Co., urged his traders to buy up credit default swaps that would pay out if mortgages began to go bad. Firstly, they lost money, however, in the beginning of 2006 Ameriquest Mortgage Co. paid about three hundred million dollars for improper lending practices. As a result of doubling down his two funds, used to bet against the housing sector, rose between 300% and 600% last year. |
|
|
Term
|
Definition
| saw the credit crash coming in 2005, but was overconfident in his counting on Federal liquidity and investors from outside the US to come to Wall Streets aid. Russo, took precautionary bankruptcy filings for Lehman, but falsely reassured the other board members and execs that it would not occur. His missteps ended up being massively detrimental. |
|
|
Term
| What historic reference does the term “Crossing the Rubicon” come from? Briefly explain. What is the “Rubicon” that was crossed in Chapter 9? (hw 2) |
|
Definition
| “crossing the Rubicon” to quantify a situation in which one arrives at a point of no return. “Crossing the Rubicon” is based on the crossing of the Rubicon River by Julius Caesar’s army in 49 BC, which was considered an act of treason. The river’s significance was in that it marked the boundary between several Roman provinces, which mean Caesar was bringing an army into neighboring provinces, and, thus, was ready to accept the consequences. Lowenstein uses the “Rubicon” as a metaphor for the Federal Reserve and Treasury’s crossing of a serious line. Lowenstein breaks down that, “Without public consideration… the Fed and the Treasury… nationalized responsibility for private obligations.” This came as a result of the Fed essentially becoming the bank of Wall Street. Further, rates were cut, which encouraged lenders to continue lending (often times risky lending practices) when the true problem was insufficient capital. |
|
|
Term
| name five underlying causes of massive decline in the value of the mortgage backed securities? (hw 2) |
|
Definition
a. Subprime Lending (similar to the predatory lending); people who could not qualify for able to receive loans regardless, resulting in a decreased ability to repay according to the terms set forth in the promissory note.
b. Property Lending; common occurrence which subjects people to a hike in payment value resulting in many being unable to make the payment and forcing them into default/ foreclose.
c. Subpar Amount of Assets to Capital; Many received loans when no actual property had been held as collateral.
d. Pressure from Shareholders and Congress; Allowed loose regulations on loans offered and are part of what lead to the Truth in Lending Act. The results were detrimental; causing people to sign for loans they did not know well enough and/ or did not have the ability to pay. Congress ignored the issue, failing to make any efforts until after the market had already collapsed.
e. Lack of Governmental Regulation; resulted in many unregulated loans that should have never been offered on the massive scale in which they were. |
|
|
Term
| What historic reference does the term “Crossing the Rubicon” come from? (hw 2) |
|
Definition
| “Crossing the Rubicon” is based on the crossing of the Rubicon River by Julius Caesar’s army in 49 BC, which was considered an act of treason. The river’s significance was in that it marked the boundary between several Roman provinces, which mean Caesar was bringing an army into neighboring provinces, and, thus, was ready to accept the consequences. |
|
|
Term
| What is the “Rubicon” that was crossed in Chapter 9? (hw 2) |
|
Definition
Lowenstein uses the phrase, “crossing the Rubicon” to quantify a situation in which one arrives at a point of no return
Lowenstein uses the “Rubicon” as a metaphor for the Federal Reserve and Treasury’s crossing of a serious line. Lowenstein breaks down that, “Without public consideration… the Fed and the Treasury… nationalized responsibility for private obligations.” This came as a result of the Fed essentially becoming the bank of Wall Street. Further, rates were cut, which encouraged lenders to continue lending (often times risky lending practices) when the true problem was insufficient capital. |
|
|
Term
| What were the underlying causes of massive decline in the value of the mortgage backed securities? Name at least 5. (HW 2) |
|
Definition
subprime lending,
property lending,
subpar amount of assets to capital,
pressure from shareholders and congress,
lack of gov'tal regulation |
|
|
