Glossary

Construction and real estate development terminology you'll hear on every call. Search, skim, and memorize.

AIA pay app: Standardized monthly invoice format (G702/G703) GCs use to bill owners for completed work.; "They submit the AIA pay app on the 25th and we cut the check by the 10th."
ATO (Authority to Operate): Security authorization required before a system can hold government data.; "We need ATO before we can stand up the platform on this contract."
Bid leveling: Comparing subcontractor bids apples-to-apples by normalizing scope, exclusions, and assumptions.; "Pre-award, the PM does bid leveling on the three mechanical bids before recommending one."
BIM (Building Information Modeling): Digital representation of a building's physical and functional characteristics. Used for design, construction, and operations.; "The architect's BIM model is the source of truth for clash detection."
Capex (Capital Expenditure): Money spent on construction or major upgrades, separate from operating expense.; "Their capex budget is $40M this year, split across three campuses."
Capital stack: The layers of financing on a real estate project — senior debt, mezz, preferred equity, common equity. Each layer has different return expectations and reporting requirements.; "Their capital stack on this deal is 65% senior, 15% mezz, 20% equity."
Change order: A documented modification to scope, schedule, or cost after the contract is signed.; "That foundation surprise turned into a $400k change order."
Closeout: The final phase: punch list, warranties, O&M manuals, lien waivers, final pay app.; "We're 90% done but closeout always takes another two months."
CMAR (Construction Manager At Risk): Delivery method where the CM commits to a guaranteed maximum price and takes on overrun risk.; "They're delivering this one CMAR — different risk profile than design-bid-build."
CMMC (Cybersecurity Maturity Model Certification): Defense contractor security framework. Required for many DoD-related projects.; "Anyone touching DoD work needs CMMC Level 2 minimum."
COI (Certificate of Insurance): Document confirming a contractor or sub carries required insurance coverage. Standard pre-mobilization gate.; "We can't let them on site without a current COI on file."
Critical path: The longest sequence of dependent tasks in a project schedule. A delay on any critical path task delays the whole project.; "Steel delivery is on the critical path — every day late is a day late on substantial completion."
Daily log: Daily field record of work performed, weather, manpower, deliveries, and incidents.; "The super logs daily — anything not in the daily log didn't happen."
DD (Due Diligence): Investigation period during which a buyer evaluates a property or deal before commitment.; "They have 60 days of DD to walk away clean."
Deferred maintenance: Facility work that's been postponed, accumulating as backlog. Common in higher ed and institutional portfolios.; "They've got $300M in deferred maintenance that competes with new construction every budget cycle."
Design-build: Delivery method where one entity holds both design and construction contracts. Faster than traditional, less owner control.; "They went design-build to compress the schedule."
Draws: Scheduled disbursements of construction loan funds tied to completed work and lender approval.; "The lender funds the next draw once the inspector signs off on framing."
EAC (Estimate at Completion): Forecasted final cost of a project based on actuals to date plus remaining estimate.; "Our EAC is tracking 4% over budget. Need to flag the change orders driving it."
Entitlement: The process of obtaining government approvals (zoning, permits, environmental) needed to develop a property.; "Entitlement took 18 months — twice as long as we underwrote."
FAR (Federal Acquisition Regulation): The master rulebook for federal government procurement.; "Every change has to be FAR-compliant or it doesn't count."
FedRAMP: Federal cloud security authorization framework.; "They won't even talk to us until we have FedRAMP."
Float: Schedule slack — the amount of time a non-critical task can be delayed without affecting the overall completion date.; "That activity has 10 days of float, so we can shift resources to the critical path without risk."
General conditions: Indirect costs of running a project — site supervision, temporary facilities, equipment, utilities. Usually a percentage of the total contract.; "Their general conditions came in at 8% — high but consistent for a project this complex."
GMP: Guaranteed Maximum Price — contract type capping the owner's exposure; GC eats overruns above it.; "We're working under a GMP, so any overage on steel comes out of their fee."
GSA Schedule: Pre-negotiated contract vehicle administered by the General Services Administration that lets federal buyers purchase from approved vendors faster.; "Without a GSA Schedule listing, federal sales cycles get a lot slower."
Hard cost / Soft cost: Hard costs = physical construction (materials, labor). Soft costs = professional fees, permits, financing, insurance.; "Hard costs are about 75% of the project budget; soft costs cover the rest."
IDIQ (Indefinite Delivery, Indefinite Quantity): Federal contract type used for ongoing project work where exact quantities aren't pre-determined.; "They're an IDIQ holder — that opens up dozens of task orders."
IFB (Invitation for Bid): Formal solicitation in public procurement asking vendors to submit sealed bids. Used when requirements are clearly defined.; "They issued the IFB last month — bids are due by the 30th."
IRR (Internal Rate of Return): The discount rate that makes the net present value of a project's cash flows equal zero. Used to compare investment returns across deals.; "Their underwriting IRR was 22%; they're now tracking closer to 15%."
Joint venture (JV): A partnership between two or more parties to share ownership and management of a project, typically for capital, risk, or expertise.; "They're doing this one as a JV with a local sponsor — gets them market knowledge they don't have in-house."
LEED: Leadership in Energy and Environmental Design — a green building certification system from the US Green Building Council. Common requirement on institutional and government projects.; "They're targeting LEED Gold, which means a tighter envelope and specific MEP requirements."
Lien waiver: Signed document where a contractor or sub waives the right to file a mechanic's lien for work covered by a payment.; "We don't release the check until we have signed lien waivers from every sub."
LOI (Letter of Intent): Non-binding document signaling intent to enter into a future contract.; "They sent an LOI for the next phase — contract should follow in 30 days."
Long lead items: Materials or equipment that take significant time to procure and have to be ordered well before they're needed.; "We're 12 weeks out on the switchgear — that's a long lead item we need to order now."
Lookahead: Short-term schedule (usually 2–3 weeks) showing upcoming work, used in weekly OAC meetings.; "Pull up the three-week lookahead — what's blocking trade #4?"
LTC (Loan to Cost): The ratio of a construction loan to total project cost. Typical lenders fund 65–75% LTC, with the developer covering the rest as equity.; "They got 70% LTC from the senior lender; they're filling the gap with mezz."
Master plan: Long-term plan for campus or portfolio development. Common in higher ed and large institutional clients.; "Their master plan calls for $500M in capital projects over the next decade."
MEP (Mechanical, Electrical, Plumbing): Building systems supplying heating, cooling, power, water, and waste removal.; "MEP coordination starts in pre-con — clashes between the trades cost millions if caught late."
Mobilization: The activities and costs at the start of a construction project — setting up the site, moving in equipment, hiring labor, establishing logistics.; "We're three weeks from mobilization. Submittal log has to be approved by then."
Mockup: A full-scale or partial-scale physical model of a construction element built to confirm design, quality, and constructability before full installation.; "They're building a brick mockup on site so the architect can sign off before the rest of the facade goes up."
NOI (Net Operating Income): A property's annual income after operating expenses but before debt service. Core metric for valuing income-producing real estate.; "Once stabilized, NOI projections are $4.2M annually."
NTP (Notice to Proceed): Formal notification from the owner authorizing the contractor to begin work.; "They got NTP last Tuesday — they're 18 days into a 22-month build."
O&M (Operations & Maintenance): Documentation, manuals, and procedures for operating and maintaining a building's systems after construction.; "O&M manuals are part of closeout — facilities team won't take handoff without them."
OAC meeting (Owner-Architect-Contractor): Standing weekly meeting between owner, architect, and contractor to coordinate on the project.; "Decisions happen in the OAC — if you weren't in the OAC, you don't have a say."
Owner's Rep: Third-party hired by the owner to represent their interests during construction. Common on large or complex projects.; "The owner's rep is who we sell to most often — they care about reporting."
Pre-con: Pre-construction: planning phase where scope, budget, schedule, and team are locked in before mobilization.; "We're still in pre-con — no shovels in the ground yet."
Pro forma: Financial model showing expected costs and returns on a real estate project. Updated continuously during construction.; "The pro forma assumed $180/sf hard costs — we're tracking $192."
PSA (Purchase and Sale Agreement): The contract between a buyer and seller of real estate that lays out terms, contingencies, and timing of the sale.; "PSA was signed last week. Closing is contingent on entitlement."
Punch list: Outstanding minor items the GC must complete before the project is considered done.; "Substantial completion is hit, we're just working through the punch list."
Retainage: A percentage of each pay app the owner withholds (usually 5–10%) until the project is complete.; "They're holding 10% retainage and we won't see it until closeout."
RFI: Request For Information — a formal question from the contractor to the design team.; "There are 47 open RFIs and the GC says they can't proceed on the east wing until they're answered."
RFP (Request for Proposal): Formal solicitation asking vendors to submit detailed proposals for a project. Common in higher ed and government procurement.; "The RFP dropped Monday. Response is due in 30 days, with a 200-page limit."
RFQ (Request for Quotation): Solicitation requesting price quotes for clearly defined goods or services. Less detailed than an RFP.; "They sent an RFQ for the AV systems on three projects."
Self-perform: When a GC executes work directly with their own crews rather than subcontracting it. Common for concrete, framing, or other core trades.; "They self-perform concrete — gives them better margin and schedule control."
SoV: Schedule of Values — line-item breakdown of the contract sum used to track progress billing.; "The SoV has 38 line items; they bill against each one monthly."
SOW (Scope of Work): Document defining the specific work, deliverables, timeline, and pricing under a contract. Common in government and consulting contexts.; "Each task order under the IDIQ has its own SOW."
Stabilization: When a property reaches full occupancy or income — a milestone on most pro formas.; "They underwrote 18 months to stabilization. They're at month 22."
Submittal: Shop drawings, samples, and product data the contractor submits for design team approval before installing.; "The submittal for the curtain wall has been sitting with the architect for three weeks."
Substantial completion: Point at which a project is sufficiently complete for the owner to use it for its intended purpose. Triggers warranties and the closeout process.; "Substantial completion was hit two weeks ago — we're working through punch list now."
TI: Tenant Improvements — interior buildout work done to customize a leased space for a tenant.; "The landlord is funding $80/sf in TI for the new tenant."
Value engineering (VE): Modifying scope or specifications to reduce cost while maintaining function.; "They came in $2M over budget — VE'd $1.4M out of the lobby finishes."