Can anyone tell me what the term "mark to market" refers to?
I know this is a dumb question but I'm on the market research side of things at a brokerage so I'm like 50% aware of everything the brokers talk about.

Did I infer correctly that "mark to market" is raising rents from current levels to market rates? Or is it something else?

Also, as long as I'm in the dumb question zone... what's a "rifleshot"?
[{"id": "gnvyxqm", "text": "It can be a lot of things. Literally, as a verb, it means to assign your positions the value in the market: you have 200 shares of IBM that yesterday were $35 and now they're $32, update their value in your spreadsheet/trading blotter to the current price. As a noun, it means the unrealized P&amp;L (your mark-to-market is -$600). \n\nBut people in the industry use it as a metaphor for adjusting your expectations to reality or being realistic. I've never heard it used for raising rents up to market levels, and strictly speaking since that requires work and getting people to agree or replacing tenants, I don't think it's a great use of the metaphor but I'm not the metaphor police.\n\nI assume rifleshot is just an antonym to scattershot. Finance bros thinking they are snipers and able to pitch some deal to exactly the one person who will buy it or something like that. Again never heard it used but you hear plenty of similarly douchey bschool sloganeering over time.", "replies": [{"id": "gnwtnjg", "text": "\u201cdouchey bschool sloganeering. . .\u201d  Haha, awesome!  I\u2019m going to use that, if you don\u2019t mind.", "replies": [], "depth": 2}, {"id": "gnx5ngv", "text": "Lol sloganeering.", "replies": [], "depth": 2}], "depth": 1}, {"id": "gnvzf82", "text": "\"Mark-to-market\" typically refers to updating the valuation of an asset to reflect the current market conditions. Depending on regulations and asset class, if/as assets are carried on your books you must adjust the valuation accordingly.\n\nLiquid, exchange traded assets (e.g. stocks) this happens easily and automatically. You buy 100 shares of XYZ at $20 for $2000. XYZ goes up to $21. Your position is now worth $2100. Something like a custom equity derivative entered into won't have this sort of obvious price change. So you have to call the trading desk for a price quote to 'mark to market' your position.\n\nTBH I've not heard this applied to CRE but perhaps publicly traded CRE cos/REITs may have to mark their properties to market in a similar way?", "replies": [{"id": "gnwhevn", "text": "I\u2019m a fund manager at an institutional firm, we are required by our fund documents to value the properties we own fairly each quarter - it\u2019s a \u201cmark to market\u201d process. It is a common / required practice for virtually every institutional fund investor that I know of.", "replies": [{"id": "gnwnhk3", "text": "Agreed, work at a small resi fund in UK. We get external valuations of all physical assets every 6 months.", "replies": [], "depth": 3}, {"id": "gnwoe7e", "text": "Well there you go. Thanks for chiming in. As an independent CRE I have no imperative to do this (not that I don't try to track market value to some degree).", "replies": [{"id": "gnwvc7w", "text": "You\u2019re not missing much it\u2019s a pain in the ass process... valuations team and asset management present values to me then I present to valuation committee... ends up being a lot of work to create a theoretical value for stuff that your aren\u2019t going to sell anytime soon. That being said I manage a discretionary fund, it\u2019s more important for my colleagues on open end and SMAs who get paid on GAV...", "replies": [{"id": "gnxatu7", "text": "That makes sense. The funny (\"funny\") thing about marking to market in equity derivatives is that customers would call in quarterly for a MTM quote. But then occasionally they'd ask for a bid and magically it was 5% lower. At least.", "replies": [{"id": "gnxf6pv", "text": "The most important thing in marking is to make sure your Mark never moves materially until the property is under contract!", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gnw14un", "text": "I've heard it used in CRE contexts but for adjusting a non-market mortgage, as a sales price adjustment.", "replies": [], "depth": 1}, {"id": "gnw2p7y", "text": "Mark-to-market is a common underwriting approach...it's just short-hand for marking down/up your property's rents to match the prevailing market rates for comparable properties.\n\nIt can also be used in the context of a valuation, but for CRE, referring to rents is where it is mostly used.", "replies": [], "depth": 1}, {"id": "gnw2svh", "text": "When buying or selling a property in a bull market values get pushed higher by the potential to raise in place rents to what current market is or what an assumed higher market rent might be when those leases roll over.  Real estate values and rents only go up (/s) so I\u2019ve never heard it in a bear market.  Not sure about rifle shot other than guessing that it might be a statistical outlier vs a broader market rent.", "replies": [], "depth": 1}, {"id": "gnw3jww", "text": "Are you looking at a rent subsidized property perhaps?   Section 8 HAP, housing choice vouchers, etc?  \n\nIn the works of rent restricted affordable housing, mark-to-market carries a different meaning than the other commenters have described.", "replies": [], "depth": 1}, {"id": "gnwh27y", "text": "Mark to market can mean two things - (1) adjusting rental rates and expense levels in an underwriting to match current levels (2) in portfolio management it means adjusting your assets internal valuation to reflect what it could be sold for today. LPAs typically require it quarterly, some funds require third party appraisals, some funds are able to do it internally (but subject to 3rd party audit) by applying an appropriate discount rate to a DCF of future cash flows for equity deals or on debt positions spread marking the loan to reflect current pricing based on market yields for loans of a similar duration and risk.\n\nEdit - LPA is limited partner agreement = governing fund documents", "replies": [], "depth": 1}, {"id": "gnwtda9", "text": "Generally (not always) it means, mark the value of the asset ***to*** the value the market places on it.\n\nIn 2008 (and near) many loans had been assigned a (low) financial value (\"discounted\") based on formulas that the feds gave banks....even as the market *willingly* paid more for them...indeed, even when those very banks had sales of these assets at higher prices.\n\nBecause the \"approved\" values were lower, banks could only borrow against the approved (lower) values, thus stifling cash flows for banks....thus stifling available cash for borrowers.\n\n(Thus deepening, quickening and, many insist, lengthening the recession).", "replies": [], "depth": 1}, {"id": "gnx39ru", "text": "It's essentially a valuation update as real estate is relatively illiquid when compared to stocks and the broader public markets. Lots of institutions run periodic (i.e. quarterly) mark-to-market exercises throughout the year for fiscal, portfolio management (asset allocation and benchmarking), and internal compensation purposes.\n\nIt's a necessary albeit silly process as it's just too easy to manipulate the numbers (which many firms do and get away with)", "replies": [], "depth": 1}, {"id": "gnyijm1", "text": "I\u2019m an affordable housing developer. We apply this term when discussing rent restructuring that will mark the rent up to current market value.", "replies": [], "depth": 1}]