Factors of production
The rudimentary components of any production process or system consisting of: land and
land-based resources (including raw materials); capital, which includes real capital such as
machinery, facilities, and infrastructure and financial capital to start or expand businesses;
labor or human input (as defined in terms of labor hours or quality/productivity); and
technology which includes production know-how and methods, as well as management and
operations skills.
Fair value of an asset (or liability)
The amount at which the asset (or liability) could be bought (or incurred) or sold (or
settled) in a current transaction between willing parties, that is, other than in a forced or
liquidation sale. (Real Estate Information Standards)
Fashion/specialty center
This type of retail center is composed mainly of upscale apparel shops, boutiques, and craft
shops carrying selected fashion or unique merchandise of high quality and price. These
centers need not be anchored, although sometimes restaurants or entertainment can
provide the draw of anchors. The physical design of the center is very sophisticated,
emphasizing a rich décor and high-quality landscaping. These centers usually are found in
trade areas having high-income levels.
Feasibility analysis
The process of evaluating a proposed project to determine if that project will satisfy the
objectives set forth by the agents involved (including owners, investors, developers, and
lessees).
Financial leverage
The use of borrowed funds to acquire an investment.
Financial risk
The possible change in an investment’s ability to return principal and income.
Fixed expenses
Costs that do not change with a building’s occupancy rate. They include property taxes,
insurance, and some forms of building maintenance.
Fixed lease
A lease in which the lessee pays a fixed rental amount for the duration of the lease.
Flex space
Space that is flexible in terms of what it can be used for (for example, space that could be
utilized for industrial or office activities). Also see cross-over (office use) demand.
Forecast
An estimate or prediction of a future condition or outcome
Forecast period
An upcoming time period of interest in which a forecast is to be made.
Formal (or geographic) data
Information/data collected and presented by formal region. Also see formal region.
Formal region
A region identified by political jurisdiction or on the basis of the presence or absence of one
or more distinguishing features or characteristics.
Free rent
See rent concessions.
Fully amortized mortgage loan
A method of loan amortization in which equal periodic payments completely repay the loan.
Functional components
Factors which determine how a location or site functions.
Functional data
Information/data collected and presented by functional region. Also see functional region.
Functional feasibility
Considerations made in the site selection process which assist in the evaluation of site
potential as defined in terms of the practicality of a site, the best site for a given use, or the
determination of a site’s best use, through the examination of linkages, competition,
demographics, and market conditions.
Functional obsolescence
A form or source of accrued depreciation considered in the cost approach to market value.
The reduced capacity of a property or improvements to perform their intended functions due
to new technology, poor design, or changes in market standards.
Functional region
A region delineated in terms of linkages or economic interactions that are typically
organized as a trade area about a dominant location, center, or economic activity.
Future value (FV)
The amount to which money grows over a designated period of time at a specified rate of
interest.
FV
See future value.