NOI — Net Operating IncomeAnnual income after operating expenses but before debt service and taxes. The foundation of most CRE valuation. NOI = Gross Income − Operating Expenses

Cap Rate — Capitalization RateThe unleveraged yield on a property. Cap Rate = NOI ÷ Price Lower cap rate = higher price and lower perceived risk.

Cash-on-Cash Return - Annual pre-tax cash flow ÷ total cash invested. Measures the return on your equity, factoring in the loan.

DSCR — Debt Service Coverage RatioLenders' key test — DSCR = NOI ÷ Annual Debt Service 1.25× is a common minimum (income covers the mortgage 1.25 times).

LTV — Loan-to-ValueLoan amount ÷ property value. Commercial LTVs typically top out at 65–80%.

LTC — Loan-to-CostLoan amount ÷ total project cost. Used in construction and development.

IRR — Internal Rate of ReturnThe annualized return over the full hold, accounting for the timing of all cash flows plus the sale.

Equity Multiple - Total cash returned ÷ total cash invested — e.g. 2.0× means you doubled your money over the hold.

GRM — Gross Rent MultiplierPrice ÷ gross annual rent. A quick, rough screening ratio.

Amortization - The schedule over which the loan is repaid (e.g. 25–30 years). Often longer than the term.

Term / Balloon - The actual loan period (e.g. 5, 7, or 10 years), after which the remaining balance — the balloon payment — comes due.

Interest-Only (I/O) - A period where you pay only interest and no principal, boosting early cash flow.

Recourse vs. Non-Recourse - Recourse: the lender can pursue your personal assets on default. Non-recourse: the lender is limited to the property, with "bad-boy" carve-outs.

Prepayment Penalty - A fee for paying off early. Common forms: yield maintenance, defeasance, or step-down (e.g. 5-4-3-2-1%).

Assumption - A buyer taking over the seller's existing loan and its terms.

Bridge LoanShort-term financing to "bridge" to permanent financing or to stabilization.

Mezzanine Debt - A layer between senior debt and equity — higher rate, secured by ownership interest rather than the property itself.

Spread - The lender's margin added over an index — e.g. SOFR + 250 bps.

Basis Point (bps) - One hundredth of a percent. 100 bps = 1%.

Price PSF - Price per square foot — a common comparison metric.

Rentable vs. Usable SF - Rentable includes a share of common areas; usable is the tenant's exclusive space. The Load Factor is the difference.

Pro Forma - A projected financial statement modeling a property's future performance.

Comps - Comparable recent sales or leases used to estimate value.

Highest and Best Use - The legally and physically possible use that yields the maximum value.

Stabilized Value - The value once a property reaches normal, sustained occupancy.

Gross Lease - Tenant pays rent; landlord covers most operating expenses.

Net Lease (N, NN, NNN) - Tenant pays rent plus some or all of taxes, insurance, and maintenance. Triple Net (NNN) means the tenant pays all three.

Modified GrossA hybrid — operating expenses split between landlord and tenant.

CAM — Common Area MaintenanceShared-area costs (parking, lobbies, landscaping) passed through to tenants.

EGI — Effective Gross IncomePotential gross income minus vacancy and credit loss, plus other income.

Vacancy Rate - The percentage of leasable space sitting unoccupied.

Absorption - Net change in occupied space over a period — positive means the market is filling up.

TI — Tenant ImprovementsBuild-out allowances a landlord gives a tenant, often quoted per square foot.

Escalation Clause - Scheduled rent increases — a fixed percentage, or tied to CPI.

1031 Exchange - A U.S. mechanism for deferring capital gains tax by rolling proceeds into a "like-kind" property. Canada has no direct equivalent.

SPE / SPV - Single-Purpose Entity — a company holding one property, common in CRE lending.

GP / LP - General Partner (the sponsor/operator) versus Limited Partner (a passive investor).

Preferred Return ("Pref") - The return LPs earn before the GP shares in profits.

Waterfall - The tiered structure for splitting profits between the GP and the LPs.

Due Diligence - The investigation period — inspections, title, environmental, and financials.

Phase I, or II ESA - An Environmental Site Assessment screening a property for contamination risk.

Estoppel Certificate - A tenant-signed statement confirming lease terms — required by lenders and buyers.

Cap Ex — Capital Expenditures - Major long-term investments (roof, HVAC) — distinct from operating expenses.

Term vs. Amortization - In Canada these are almost always different. The amortization (e.g. 25 years) is the full payoff schedule; the term (e.g. 5 years) is how long the rate is locked before you renew. You'll renew several times over one amortization.

Renewal - At term-end you renegotiate the rate for a new term with the same or a new lender — a core feature of Canadian lending, unlike the U.S. 30-year fixed.

IRD — Interest Rate Differential - The most common prepayment penalty on fixed-rate Canadian mortgages — roughly the lender's lost interest if you break early. Can be large; the lender charges the greater of the IRD or three months' interest.

VTB — Vendor Take-Back Mortgage - The seller finances part of the purchase price for the buyer — common in Canadian commercial deals to bridge a financing gap.

CMHC - Canada Mortgage and Housing Corporation — the federal crown corporation that insures mortgages. Its programs make multi-residential commercial financing far cheaper.

MLI Select - CMHC's flagship multi-unit (5+ units) insurance program. Rewards affordability, energy efficiency, and accessibility with higher LTV (up to 95%), longer amortization (up to 50 years), and lower rates — a major driver of Canadian apartment-building economics.

Conventional vs. Insured - Insured (CMHC) loans carry a premium but unlock better terms; conventional loans have no insurer and stricter LTV.

Firm vs. Conditional - An offer is conditional while subject to financing, inspection, or due diligence; it goes firm — binding — once the conditions are waived.

TMI — Taxes, Maintenance, InsuranceThe Canadian term for what Americans call NNN / triple-net pass-throughs. Quoted as "$X net + $Y TMI" per square foot. TMI is the "additional rent."

Additional Rent - A catch-all for operating costs charged on top of base ("net") rent — TMI plus CAM.

Net + Additional - The standard Canadian quote format: base net rent per square foot plus additional rent (TMI) per square foot.

Realty Taxes - Property taxes — in commercial leases, almost always passed through to the tenant via TMI.

No 1031 Exchange - Canada has no like-kind tax-deferral equivalent for ordinary CRE sales. Selling triggers capital gains — don't apply U.S. 1031 logic to a Canadian deal.

Section 44 — Replacement Property Rules - The closest partial analog. Allows deferral of gain or recapture when a property is involuntarily disposed of (expropriation) or is a former business property replaced within set timelines. Much narrower than a 1031.

Section 85 Rollover - Lets you transfer property into a corporation on a tax-deferred basis — e.g. moving an asset into a holdco.

CCA — Capital Cost Allowance - Canada's tax depreciation. Buildings are typically Class 1 at 4% declining balance. Optional to claim; it reduces taxable income.

Recapture - If you've claimed CCA and sell above the depreciated value, the previously deducted CCA is "recaptured" and taxed as income.

Capital Gains Inclusion Rate - Only a portion of a capital gain is taxable. The proposed increase to 66.7% on gains over $250K was deferred — verify the current rate at the time of sale, as this has been in flux.

GST / HST on Commercial Property - Commercial real estate sales and leases are taxable (5% GST, or 13% HST in Ontario). Registrants typically self-assess on purchase and recover it via Input Tax Credits — often cash-flow neutral, but the mechanics matter.

LTT — Land Transfer Tax - A provincial tax on closing, on a sliding scale. Toronto adds a second municipal LTT on top of Ontario's — effectively doubling it within the city.

MPAC - Municipal Property Assessment Corporation (Ontario) — sets the assessed values that drive property taxes. Other provinces have equivalents, such as BC Assessment.

Development Charges (DCs) - Municipal fees levied on new development to fund infrastructure — a significant line item in Canadian development pro formas.

Zoning Bylaw - Municipal regulation of permitted use, density, height, and parking. A rezoning or minor variance may be needed to change the use.

Official Plan - The municipality's long-term land-use policy framework, which zoning must conform to.

ICI / ICR - Canadian commercial listings often fall under ICI (Industrial, Commercial, Investment) or ICR boards — frequently not on the residential MLS® system.

Estoppel Certificate - As in the U.S. — a tenant-signed confirmation of lease terms, standard in Canadian purchase and financing due diligence.

UHT / Foreign Buyer Ban - Federal measures aimed mainly at residential property and non-residents — generally not applicable to true commercial assets, but worth flagging when a deal has a residential component.