Absorption
The amount of inventory or units of a specific commercial property type that become
occupied during a specified timeperiod (usually a year) in a given market, typically reported
as the absorption rate.

Accumulated cost recovery
Total cost recovery deductions taken throughout the holding period of a property.

Active income
Income from salary, wages, tips, commissions, and activities in which the taxpayer
materially participates. Also see passive income.

Add-on factor
The ratio of rentable to useable square feet. Also known as the load factor and the
rentable-to-useable ratio. Also see efficiency percentage. Formula:
Add-on factor =Rentable square feet / Useable square feet

Add value
Fourth stage of four-stage transaction management process pertaining to a transaction
manager’s planning, effort, and continual contact with key decision-makers, investors, and

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