FACE RENTAL RATE:  The asking or nominal rental rate published by the landlord.

FAIR MARKET VALUE:  A term usually found in appraisals that attempts to determine the cash price that would likely be negotiated between a willing seller and willing buyer in a reasonable amount of time.  For a sale to be considered a reflection of Fair Market Value, it must meet all the conditions of a fair sale whereby:  (1) both buyer and seller act prudently, knowledgeably, and under no necessity to buy or sell, e.g. other than in a forced or liquidation sale; (2) the property must be offered on the open market for a reasonable amount of time, taking into consideration the property type and local market; and (3) payment is made in cash or terms equivalent to cash.  When a sale is unlikely, e.g. when it is unlikely to be completed within 12 months, the appraiser must discount all cash flows generated by the property to ascertain the estimate of Fair Value.

FEASIBILITY STUDY:  An analysis of needs, costs of recommended improvements, and anticipated revenue and costs; establishes the basis for the construction of an individual improvement or a complete system.

FEE SIMPLE:  An estate of real property that the owner has unrestricted powers to dispose of and which can be left by will or inherited.  Commonly used as a synonym for ownership.

FINANCE CHARGE:  The cost of credit as a dollar amount.  It includes any charges payable by the borrower as a condition of the loan.  The finance charge includes the total amount of interest, points, loan fees, and other credit charges paid for the term of the loan.  Does not include amounts charged for insurance premiums, delinquency charges, attorney’s fees, court costs, collection expenses or official fees.  Regulated by state and federal truth in lending statutes which require full disclosure of finance charges.

FIRREA:  The Financial Institutions Reform Recovery and Enforcement Act of 1989.  The Act Created the Resolution Trust Corp. (RTC) and placed new restrictions on savings and loans regarding real estate investment.

FIRST MORTGAGE:  A mortgage creating a lien against a property which has priority over all other voluntary liens that exist against the property.  Foreclosure of a first mortgage lien will generally extinguish or cut off any second mortgage lien or other subordinate lien.

FIRST REFUSAL RIGHT:  A clause occasionally inserted into a lease that gives a tenant the first opportunity to buy a property if the owner decides to sell.  The owner must have a legitimate/good faith offer which the tenant can match or refuse.  Also known as Right of First Refusal.

FIXED COSTS:  Costs, such as rent, which do not fluctuate in proportion to the level of sales or production.

FLEX SPACE:  A one or two-story building with high ceilings, load-bearing floors, and loading area facilities (grade level or dock high), wih little or no interior common areas.  Usually configured to allow a specific amount of office space in combination with showroom, studio, laboratory or warehouse/distribution uses.

FLOOR/AREA RATIO (FAR):  The ratio of the bulk area of a building to the land on which it is situated.  Calculated by dividing the total square footage in the building by the square footage of land area.  A term commonly used to indicate the allowable square footage of a building according to zoning requirements.

FLOODPLAIN:  Land adjoining a river that would flood if the river overflowed its banks.

FORCE MAJEURE:  A force that cannot be controlled or resisted.  Something beyond the control of the parties involved.  Includes acts of God (flood, tornadoes, etc.) and acts of man (riots, strikes, arson, terrorism, war, etc.).

FORECLOSURE:  A proceeding, in or out of court, designed to extinguish all rights, title, and interest of the owner(s) of property in order to sell the property to satisfy a lien against it.

FULL RECOURSE:  A borrowing with an unconditional guaranty.  Should the borrower become delinquent under a full recourse loan, he or she must accept full responsibility for the loan.

FULL SERVICE RENT:  A lease that provides that the tenant agrees to pay a share of the landlord’s operating expenses including insurance, maintenance/janitorial, and real estate taxes for the building proportionate to the amount of space tenant occupies.  (See also Triple Net Rent – NNN.)

FUTURE PROPOSED SPACE:  Commercial space in proposed development projects that either have not started construction or set a construction start date.  Future proposed projects include all those waiting for a lead tenant, financing, zoning, approvals, or any other event necessary to begin construction.  Also may refer to the future phases of a multi-phase project that have not yet been built.

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