A type of deed where the grantor or the seller guarantees that he/she holds clear title to a piece of real estate and has a right to sell it. The guarantee is not limited to the time the grantor owned the property. It extends back to the property's origins.

A government-related agency that is part of the Department of Housing and Urban Development (HUD) and uses the “full faith and credit” of the U.S. government in borrowing. GNMA guarantees securities collateralized by mortgages initially issued by approved lenders (thrifts, commercial banks, and mortgage banks) that pooled the mortgages, using the mortgages for collateral for the security. In so doing, GNMA supports the Federal Housing Administration (FHA) mortgage market as well as mortgages from the Veterans Administration (VA) and the Farmers Home Administration (FmHA). GNMA guarantees pass-throughs, but does not issue them, and will only guarantee a pool in which the underlying mortgages are insured or guaranteed by either the FHA, VA, or FmHA.

A lease provision that describes consequences for a tenant (typically retail) when vacating a space before the term of the lease expires even while continuing to pay rent. The provision is intended to deter such activity since vacant space is detrimental to the performance of neighboring retail stores.

The capitalization rate applied to the first year’s income. Also see Capitalization Rate and Reversionary Cap Rate .

One of several agencies formed to provide a secondary market for residential real estate loans, including Fannie Mae (Federal National Mortgage Association—FNMA); Freddie Mac (Federal Home Loan Mortgage Corporation—FHLMC); and Ginnie Mae (Government National Mortgage Association—GNMA).

Lease structure under which the landlord pays all building expenses. Also called a full service lease or a gross rent lease.

A lease on land that includes the land but not improvements or buildings on that land. In other words, the land and buildings are separate entities and are separately owned by a leasehold owner. The building owner pays rent on the land via agreement known as a ground lease to the owner of the Leased Fee Estate.

While CMBS loans typically are non recourse to the borrower in the event of losses, and lender has recourse only to the property collateral, a guarantor is generally required pursuant to a Carve-out Guaranty, providing liability for losses associated with misrepresentation or fraud, misapplication of funds, and full springing recourse for certain acts such as a voluntary or collusive bankruptcy filing, or additional secured debt or transfers in violation of the loan documents (“Bad-Boy Carveouts”).  In addition, the guaranty may also cover environmental law violations, or this could be included in a separate Environmental Indemnity.  Not all loans have a guarantor, and guarantors need not be an individual “Warm Body”, but can be a fund or corporate entity. 

See Government Sponsored Enterprise.