Labor pool
A body or core group of workers (employed and employable) that make up the local labor force.
Land sale-leaseback
The same concept as a sale-leaseback, but only the land is sold and leased back using a ground lease.
Landlord
The lessor or owner of the leased property.
Landlord-paid tenant improvements (LPTI)
The total cost (outlay) of necessary tenant improvements paid by the landlord netted against any contribution made by the tenant.
Leakage (retail)
Purchases made in other service areas by consumers located within the subject area (representing a loss of revenue for retailers located within the trade area in which those consumers reside).
Lease
A contract that creates the relationship of landlord and tenant. A contractually binding agreement that grants a right to exclusive possession or use of property, usually in return for a periodic payment called rent. (Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)
Lease buyout
The process by which a landlord, tenant, or third party pays to extinguish the tenant’s remaining lease obligation and rights under its existing lease agreement.
Lease terminology
Terms commonly used in reference to a lease.
Leased fee
In exchange for permitting a tenant to use the property, the owner/lessor has the right to receive rental income and the right to repossess the property upon termination of the lease.
Leased fee interest
The value (to the owner) of the rental payments plus the value of the property at the end of the lease term (reversionary interest).
Leasehold estate
In exchange for rent, the tenant has the right to occupy and use the property for the duration of the lease.
Leasehold interest
The value (to the tenant) of the lease. The value of the leasehold interest is determined by present value of the difference between market rent and the contract rent.
Leasing
A means of obtaining the physical and partial economic use of a property for a specified period without obtaining an ownership interest.
Lessee
The person renting or leasing the property. Also known as a tenant.
Lessor
The person who rents or leases a property to another. Also known as a landlord.
Leverage
The use of borrowed funds to finance a portion of the cost of an investment.
Lifestyle characteristics (psychographics)
Intangible characteristics of a local economy that define and shape the quality of life element and the social and cultural identity of the local population.
Linkages
The cost to transport goods, services, or people to and from a site measured in time, distance, and inconvenience.
Liquidation value
The likely price that a property would bring in a forced sale (foreclosure or tax sale). Used when a sale must occur with limited exposure time to the market or with restrictive conditions of sale.
Liquidity
The ability to convert an investment into cash quickly without loss of principal.
Load factor
The ratio of rentable area to useable area. The load factor is a gauge by which a user can evaluate different sites with comparable rents. It is also known as the add-on factor.
Formula:
Load factor = Rentable square
feet
Useable square feet
Loan balance
The amount of money remaining to be paid on an amortizing loan at a given time.
Loan or mortgage value
That portion of the value of real property recognized by the lender when used to secure a loan.
Loan point
A charge prepaid by the borrower upon the origination of a loan. One point equals one percent of the loan amount.
Loan-to-value ratio (L/V)
The amount of money borrowed in relation to the total market value of a property. Expressed as the loan amount divided by the property value.
Location analysis
The process of evaluating whether a general location meets the requirements of being both possible and practical as defined on the basis of technical and functional components.
Location quotient
An index, defined in ratio form that compares the proportion of a local activity to the proportion of that activity found at some larger geographic scale, such as the nation.
Location quotient method
A method for estimating a community’s economic base multiplier using basic employment estimates obtained from estimated location quotients (under various simplifying assumptions).
Lower order good
A good or service requiring a low threshold population to be offered. A good or service is considered to have a low threshold if it does not require a large number of consumers to support its business and thus requires a small trade area. Also see high order good.