Lease Abstract
A detailed recap of office and retail leases including tenant name, suite #, square footage, current rental rate including increases, lease start date, term, CAM requirements, extension options and rates.

Leasing Commission (Reserve) Escrow
The annual cost related to the leasing and releasing of commercial office and retail space. The amount deducted from the Net Operating Income prior to determining the net cash flow available for debt service coverage.

Lessee
An individual or entity to whom property is rented under a lease. A tenant.

Lessor
An individual or other entitywho rents property to another under a lease. A landlord.

Letter of Credit
An arrangement, with specified conditions, whereby a bank agrees to substitute its credit for a customer's.

Leveraged Buy-out
The acquisition of a company, financed primarily with borrowed money, using the acquired company’s assets to collateralize the loan.

London Interbank Offered Rate [LIBOR]
The rate that international banks dealing in Eurodollars charge each other for large loans. Some domestic banks and other lenders use this rate as an index for adjustable rate mortgages. The LIBOR rate quoted in the Wall Street Journal is an average of rate quotes from five major banks. Bank of America, Barclays, Bank of Tokyo, Deutsche Bank and Swiss Bank.

Limited Partnership
Arrangement in which there is at least one partner whose liability extends beyond monetary investment and at least one partner who is passive and limits liability to the amount invested.

Loan Application Fee
A charge required by a lender or loan originator to be paid by the borrower to cover the credit report, property appraisal and other incidental expenses associated with underwriting the loan. The fee is generally not refundable.

Loan-To-Cost Ratio [LTC]
The amount of money borrowed compared to the cost (acquisition, construction, renovation, etc.) of the project at hand.

Loan-To-Value Ratio [LTV]
The amount of money borrowed compared to the value (appraised or sale price) of the real property purchased.

Lock-Box
Rental income is delivered to a trustee (or servicer), who then pays expenses and makes the loan payment, before excess cash is released to the borrower. The lock-box removes borrower discretion and control over funds.

Locked-in Interest Rate
The rate promised by a lender at the time of loan application or commitment. On income property loans, a lock-in generally requires a commitment fee or rate lock fee from the loan applicant.