The 411 on CRE acronyms

In Bradford Buzz by Staff

LOL, SMH, OMG, AOL, POTUS, acronyms are everywhere.  Social Media, business, personal, Medical, Dental, Construction, Retail, personal and yes, even Commercial Real Estate.

What is an acronym and where did it come from? An Acronym is a word formed from the initial letters of a name or phrase. It is pronounced as if it were a word. The most common one is probably LOL (laugh out loud) or SARS (severe acute respiratory syndrome).

Now one would think that acronyms have only been around since the 20th Century, but you would be wrong. Acronyms are ancient, or so research states. Acronyms were used in Rome before the Christian era. For example, the official name for the Roman Empire, and the Republic before it, was abbreviated as SPQR (Senatus Populusque Romanus).

One of the drivers for the adoption of acronyms was modern warfare with its many highly technical terms. While there is no recorded use of military acronyms in documents dating from the American Civil War (acronyms such as ANV for “Army of Northern Virginia” post-date the war itself), they had become somewhat common in World War I and were very much a part even of the vernacular language of the soldiers during World War II, who themselves were referred to as G.I.s.

In the Commercial Real Estate world there are several common acronyms but some that are less common.

Here are a few of the common acronyms

BOV – Broker Opinion of Value

ESFR – Early Suppression Fast Response

FS – Full Service

IRR – Internal Rate of Return

LOI – Letter of Intent

TI – Tenant Improvements

Here are a few of the less common acronyms

TOD – Transit Oriented Development

SOR – Standard Direct Rate

FV – Future Value

GRM – Gross Rent Multiplier

LPTI – Landlord-paid Tenant Improvements

There is a time and place for everything and that includes acronyms also. The whole point of using them is to make your writing clearer. However if you abuse them you will accomplish just the opposite and will turn your correspondence into a confusing brew of alphabet soup.

For those that are interested, here are a few links with Acronyms for Commercial Real Estate

http://www.reiclub.com/real-estate-abbreviations.php

http://www.westerwelle.net/abbreviations.htm

http://www.biggerpockets.com/rei/real-estate-abbreviations/

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