Implied cap rate - Net operating income divided by an REIT's amount of equity market capitalization and outstanding debt.
Improvements - In the context of a lease, the improvements made to or inside a property, but can also include any permanent structure or a street, curbs, sidewalk, or utility upgrade.
Incentive fee - A fee structure where the amount of fee that is charged is determined by the performance of the real estate assets under management.
Income capitalization value - A property valuation calculated for an income-generating property by directly capitalizing the expected income or by discounting the yearly cash flows for the holding period at a specified yield rate.
Income property - Real estate produces a positive cash flow from operations.
Income return - A percentage value for the total return that is created by an operation's income from property, a fund or an account.
Indirect costs - In cost accounting, the method of allocating developmental or administrative costs, such as administrative salaries and office expenses, and financing costs, to various cost centers, product lines or projects being tracked. Direct costs, such as material and labor, are directly allocated to their specific cost centers.
Individual account management - The accounts established, by a firm serving as an adviser in purchasing and/or managing a real estate portfolio for investing in real estate, for companies sponsoring individual plans or for other investors.
Inflation - The annual rate at which consumer prices increase (government's definition), the annual loss in purchasing power of fiat currency due to deflationary monetary policies and actions of a central bank, such as the Federal Reserve (everyone else's definition).
Inflation hedge - An investment intended to retain or increase the value of an investment at a rate greater than inflation and preserve wealth and the purchasing power of a portfolio, usually a flight of capital from currency to commodities and real estate.
Initial public offering (IPO) - The first time a private corporation offers to sell its shares to the public on a public exchange.
Institutional-grade property - Real estate properties that tax-exempt institutional investors will purchase or finance. Properties usually include office, retail, industrial and apartments. Specialty properties include hotels, health care facilities, land beneath leased properties, undeveloped land, and mixed-use properties (such as property that has retail on first floor and residential on second floor).
Insurance - Financial protection against a specific loss over a period of time that is secured by the payment of a regularly scheduled premium.
Insurance company separate account - A real estate investment vehicle that only life insurance companies can offer. This kind of ownership allows ERISA-governed funds to avoid the creation of unrelated taxable income for certain types of property investments.
Internal rate of return (IRR) - A discounted cash-flow analysis calculated to figure the potential overall return of a real estate asset during its anticipated period of ownership.
Inventory - All space within a certain proscribed market without regard to its availability or condition.
Investment committee - The governing body overseeing corporate pension investments. Also, the subcommittee of a board of trustees charged with developing investment policy for board approval.
Investment manager - Any legal entity or individual that has discretionary authority for the management and investment of a specified amount of real estate capital, assets and potential to invest that capital through a separate account, joint venture program or commingled fund in assets.
Investment policy - A document that formalizes an institution's guidelines for investment and asset management. An investment policy typically will contain goals and objectives; core and specialty investment criteria and methodology; and guidelines for asset management, investment advisory contracting, fees and utilization of consultants and other outside professionals.
Investment strategy - The investment principles used by an investment manager in structuring an investment fund's or account's portfolio and selecting the real estate assets for it. This includes a description of the types, locations and sizes of properties to be considered, the ownership positions that will be used, and the stages of the investment lifecycle.
Investor status - Investors are divided into two categories
- Tax-exempt which includes all qualified pension and retirement accounts, such as IRAs and 401(k)s.
- Taxable which includes all other managed accounts.
