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Glossary
Household
A housing unit or residence at a given location that is occupied by one or more persons (that is, a social unit comprised of one or more individuals living together in the same dwelling or place).
Household population
The total number of households in a given geographic market or submarket as defined by specific demographic and socio-economic characteristics.
Housing demand
The total number of housing units demanded in a given market, defined as occupied household units divided by one minus the vacancy allowance for that market (where demand is affected by the rate at which new households are being added to the market, allowing for a normal level of vacancy).
Imbalances
Unstable or nonsustainable conditions which arise out of a market disequilibrium or the lack of balance between the forces of supply and demand in any or all subcategories of commercial properties in one or more geographic submarkets over a given time period.
Imperfect market
A market in which product differentiation exists, there is a lack of important product information, and certain buyers or sellers may influence the market. Commercial real estate is bought and sold in an imperfect market.
In-migration
The process by which a given geographic area absorbs new individuals/households from locations outside that area (an influx of individuals/households to a given area).
In-the-door approach
An approach to estimating the trade area (and sales/revenue potential) for a given retail establishment or center based on observed flow patterns or traffic counts, where estimates are obtained for both the percentage of traffic that stops or patronizes that establishment/center and the percentage of people coming in-the-door who make a purchase.
Income capitalization approach
A method to estimate the value of an income-producing property by converting net operating income into a value. The cap rate is divided into the net operating income to obtain the estimated value. Value = net operating income ÷ capitalization rate
Index lease
A lease in which the rental amount adjusts accordingly to changes and/or movements in a price index, commonly the consumer price index.
Industrial gap
The difference between the demand for an industrial property and the supply of that property in a given market or area.
Industrial location decision-making
A decision-making process that involves the examination and evaluation of alternative locations or sites for a particular industrial activity based on location/site feasibility characteristics; great importance is placed on the national or regional location decision (usually narrowing the location decision to a handful of cities or localities), with less importance given to the local site selection process.
Industrial property
Commercial properties that are used for the purposes of production, manufacturing, or distribution.