Definitions of terms used throughout Building
Commercial real estate (CRE) is property used for business-related purposes. It is most often leased to tenants to conduct income-generating activities. Individuals, companies, and corporate interests can make money from CRE by leasing it out, holding it and reselling it.
Commercial real estate is typically categorized into four classes, depending on function: Office Space, Industrial Use, Multifamily Rental, and Retail. These classes can be further classified depending on the specific use case.
Commercial real estate can also be categorized by the quality of the property. Class A represents the best buildings in terms of aesthetics, age, quality of infrastructure, and location. Class B buildings are usually older and not as competitive—price-wise—as class A buildings. Investors often target these buildings for restoration. Class C buildings are the oldest, usually more than 20 years of age, located in less attractive areas, and in need of maintenance.
The full lifecycle of real estate refers to the entire process of developing, operating, and divesting a real estate property. Building further classifies these into six stages: Concept Development, Feasibility, Planning & Financing, Project Construction, Hand Over (Operations or Sale), and Operations.
Building Information Modeling (BIM) is a collaborative process that allows architects, engineers, real estate developers, contractors, manufacturers, and other professionals to plan, design, and construct a building within one 3D model.
Underwriting can refer to the vetting process by which a sponsor or investor evaluates a real estate deal or the process a lender uses to determine the creditworthiness of a potential customer. In both cases, the real estate developer's credentials, return projections, assumed income and operating expenses, and floor plans will be assessed.
Liquidity refers to the efficiency or ease with which an asset or security can be converted into cash without affecting its market price. The more liquid an asset is, the easier and more efficient it is to turn it back into cash.
Financial instruments may be divided into two types: cash instruments and derivative instruments. The value of a cash instrument is directly determined by the markets. Derivative instruments are based on the performance of an underlying asset, interest rate, or index. Financial instruments also come in different classes, debt-based, equity-based, and foreign exchange.
Blockchain is a type of shared database that differs from a typical database in the way it stores information; blockchains store data in blocks linked together via cryptography. Different types of information can be stored on a blockchain, but the most common use for transactions has been as a ledger.
Smart contracts are scripts that automate the actions between two parties. Smart contracts do not contain legal language, terms, or agreements—only code that executes actions when specified conditions are met.
Tokenized real estate is when a real-estate property or its cash flows are represented as a blockchain token (or tokens) to increase liquidity, streamline processes, and enable digital ownership. Tokenized real estate requires a firm link between the digital asset (token) and the underlying physical asset (property).
Once data has been written to a blockchain, no one can change it. This provides benefits for audit. Both the provider and recipient of data can ensure that the data hasn’t been altered. These benefits are useful for databases of financial transactions.
On its own or combined with other technologies (e.g., sensors, geolocation, robotics) AI can perform tasks that would otherwise require human intelligence or intervention. Digital assistants, GPS guidance, autonomous vehicles, and generative AI tools (like Open AI's Chat GPT) are just a few examples of AI in the daily news and our daily lives.
Machine learning (ML) is a branch of and computer science that focuses on the using data and algorithms to enable AI to imitate the way that humans learn, gradually improving its accuracy.
Compute is used to describe concepts and objects geared towards computation and processing. For example, CPUs, APUs and GPUs are considered compute resources while graphics processing applications like 3-D rendering and video games are described as compute-intensive applications.
Edge computing optimizes Internet devices and web applications by bringing computing closer to the source of the data. This minimizes the need for long distance communications between client and server, which reduces latency and bandwidth usage.
AI hallucination is a phenomenon wherein a large language model (LLM)—often a generative AI chatbot or computer vision tool—perceives patterns or objects that are nonexistent or imperceptible to human observers, creating outputs that are nonsensical or altogether inaccurate.
A Federated Data Room (FDR) combines multiple data sources into a secure, centralized storage space for files. This allows multiple databases to function as one, allowing an organization to manage data more effectively.
Making informed decisions based on analysis and insights derived from data, such as market trends, property values, and customer behavior, rather than relying solely on intuition or experience.
Data structures work to collect various types of data (both structured and unstructured), then convert it into usable, meaningful information. The goal is to organize data so that you can do something with it. Data structures systematize the way you input, process, retrieve, and maintain information.
A data center is a physical facility that organizations use to house their critical applications and data. A data center's design is based on a network of computing and storage resources that enable the delivery of shared applications and data.