Glossary

Please Note: The following glossary is provided without warranty of any kind. It is intended for informational purposes only. Click here to print this page.

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~A~^Top
AAA Tenant: A tenant with a superior credit rating. This type of tenant can influence the developer's ability to arrange construction and permanent financing for a major commercial project.
Absolute Net: Lease requiring tenant to pay in addition to base rent all costs associated with the operation, repair and maintenance of the building, all real estate taxes, and utilities including repair and maintenance of the building's structure and roof. Often the tenant is directly responsible both for all such costs and for the active handling of the items themselves. This is different from a Triple Net lease by tenant's responsibility for upkeep and repair of the building structure and roof.
Active: A listing marked as "Active" is one that is currently available.
ADA: The Americans with Disabilities Act was passed by Congress to provide persons with disabilities accommodations and access equal or comparable to that of the general public.
Additional Agents: This term is for secondary and tertiary agents involved with a listing.
Additional Rent: Any amounts due under a leased property that are additional to base rent. Most common form is operating expense increases.
Address Latitude: A listing address's angular distance North or South from the equator of a point on the Earth's surface, measured on the meridian of the point.
Address Longitude: A listing address's angular distance East or West on the Earth's surface, measured by the angle contained between the meridian of a particular place and some prime meridian, as that of Greenwich, England, and expressed either in degrees or by some corresponding difference in time.
Agency: A relationship in which one party (agent) represents another (principal) under the authority of the latter. Agency involving property should be in writing, such as listings, trusts, powers of attorney, etc.
Allowance: A pre-set monetary figure provided by a Landlord under a lease to be used by a Tenant for specific purposes. Tenant improvements, moving expenses, and design fees, are examples of allowances. If the expense is more than the allowance amount, that amount is the Tenant's responsibility. If the expense is less than the allowance, the landlord will retain the savings unless their agreement specifies otherwise.
Alternative Workspace: Utilization of non-traditional workspace, such as telecommuting, hotelling, office sharing, and open office plans.
Amortization: Payment of debt in regular installments of principal and interest and not simply interest-only payments. Also used in a lease where the landlord incurs costs for tenant improvements that are treated as debt and repaid by tenant over the lease term.
Anchor: A well-known commercial retail business such as a national chain store or regional department store (AAA Tenant) strategically placed in a shopping center so as to generate the most customers for all of the stores located in the shopping center. This term usually applies in reference to a retail property.
Area Description: Statistics and demographics of a listing area that illustrates the listing's general vicinity.
Assignment: Transfer to another of any property, or the transfer of rights or estates in said property. This can include leases, mortgages, or deeds of trust, however the general term encompasses any transfers of title.
Auction: Real Estate that is available for bidding and not a standard sale transaction.
Available: See "Active."
Average Monthly Rent: The average rent charged monthly, usually per square foot in a commercial lease listing.
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Base Rent: A specific amount used either as a minimum rent in a lease (retail) which uses a percentage of sales or overage for additional rent, or sets a base onto which is added expenses and taxes in a net lease, or increases in those items in a fully serviced lease.
Base Year: The 12-month period upon which a direct expense escalation of rent is based. Typically the calendar year the lease commences.
Below-Grade: Any structure or a part of a structure located underground or below the surface grade of the surrounding land.
BOMA: Building Owners and Managers Association. BOMA publishes the definition of rentable and useable area, which is used to determine the square footage leased in most commercial office buildings.
Broadband: Whether or not the listing have broadband internet capability.
Broker Description: This description is written by one broker to be viewed by another broker. It can contain contact information and other information not to be seen by a potential buyer.
Building Class: A building classified from best to worst: "AAA," "A," "B," "C."
Building SF: The total square footage of a given building.
Building Size: The maximum size (or bulk) of a building on a lot is determined by the floor area ratio (FAR) assigned to each zoning district. It controls the physical volume of buildings.
Built Yet: Whether or not the structure on a listing has been built or not.
Business Type: Category of business the listing contains.
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CAM Charges: Common Area Maintenance charges. Those charges levied on or the expenses incurred in maintaining the common areas of a building.
Cap Rate: "Capitalization Rate": or the discount rate used to determine the present value of a stream of future earnings.
Capital Costs: Costs associated with the capital or investment expenditures on land, plant, equipment, and inventories. Unlike labor and operating costs, capital costs are independent of the level of output.
Cash Flow (pre tax): An analysis over a period of time revealing the availability, or lack, of cash. More simply put the difference between cash in (income) vs. cash out (expenses).
Cash Flow Type: A measure of cash inflow and outflow from the business. Positive cash flow means more money is coming into the business than is leaving it. Negative cash flow is the converse.
Cash Flow Year: The measure of cash inflow and outflow in a given year.
Category: The classification of a given listing that helps to refine a search to only the type of listings the broker is interested in.
CBSA: A geographical area consisting of a county or counties associated with at least one core, plus adjacent counties with a high level of integration as measured by commuting patterns.
Certificate of Occupancy (COO): A local government document verifying that a newly constructed building built to code and can be occupied.
Class: Class as relates to an office property and refers to the quality of property. Class definitions fall with the following guidelines. Class A+: Landmark quality, high-rise building with prime central business district location (the best of the Class A buildings). Class A: Generally 100,000 sq. ft. or larger (five or more floors), concrete and steel construction, built since 1980, business/support amenities, strong identifiable location/access. Class B: Renovated and in good locations. Newer buildings are smaller in size, wood frame construction, and/or in non-prime location. Class C: Older, un-renovated and of any size in average to fair condition.
Clearance Height: The distance between the ground and the lowest portion of the bottom of a vehicle (not counting the wheels). Also called ground clearance.
Close Date: The date of sale, or the date when proposals will no longer be accepted for a given solicitation. This is, by default, the proposal due date.
Co-op Commission: The listing broker receives a commission from the seller and agrees to share that commission with the Buyer Broker who sells the property. Most often this commission is 6% of the sales price, and one-half, or 3%, is offered to the Buyer Broker.
Commencement Date: Date on which a lease begins. Usually this is the day the tenant takes possession of the leased space, and usually occurs upon substantial completion of tenant improvements. Also referred to as Occupancy Date.
Commission: A payment for the performance of specific duties in real estate; a percentage of the selling price of property, percentage of rentals, etc.
Commission Comments: In the event of special circumstances involving the commission on a given property, those comments can be input for further clarification.
Common Area: Common area is the area used in common by all tenants of an building. Common area includes lobbies, restrooms, and the elevator corridors that extend to tenant space.
Consider Exchange: A property that is replaced with another "like kind" property instead of a traditional sale.
Contingent Fees: Fees paid in the event of a future occurrence. A broker's commission paid upon closing on a piece of property is a Contingent Fee.
Covered Parking Ratio: Covered parking ratio is the ratio of parking spaces per 1,000 square feet of gross lease-able area (GLA).
Cross Streets: The streets that intersect nearest to a given listing. Many commercial brokers search by cross-street as well as zip code.
Current Loan: The loan currently involved with a particular listing.
Current Tenant: The tenant currently leasing a particular property.
~D~^Top
Date Available: Date property is available.
Date Deleted: Date a listing was deleted from the database.
DBA: The commonly used abbreviation for "doing business as."
Debt Service: The amount of cash necessary to meet the periodic payments of principal and interest on an amortizing mortgage or debt.
Debt Type: The actual kinds of debt on a commercial property.
Demised Area: The walled off and secured area of a leased space, separated from space leased to others. It is also measured as usable area.
Down Payment: Money that borrowers need to pay at the closing of the loan.
Due: The date in which something (such as a down payment) is owed.
~E~^Top
Effective Gross: "EGI." For income-producing property potential gross income less a vacancy and collection allowance, plus miscellaneous income.
Effective Rent: The average per sq. ft. rent paid by the tenant in the course of a lease that only takes into account free and stepped rents. Does not include allowances, free parking, and other landlord concessions.
Effective Useable Area: Those areas within the Useable Space that the tenant pays rent on but effectively cannot use, such as columns or pillars.
Equivalent Level Rate (ELR): Flat rate per square foot that will equal the same total present value as a proposed lease's variable cash flows.
Escalation: A clause in a lease providing for an increased rental at a future time. There are two types of escalation clauses: fixed increase clauses call for a regular and periodic rental increase. A cost of living clause ties the rent to a cost of living index with regular adjustments as the index changes. A direct expense clause where the rent is adjusted according to changes in the expenses of the property paid by the lessor. Also referred to as Pass Throughs.
Exclusive Listing: A property where the owner has signed an agreement with a real estate broker to lease and/or sell their property.
Expense Stop: A fixed amount (usually in square foot) in a lease where the tenant is responsible for all operating expenses and taxes in excess of a pre-determined amount.
Extension Option: An agreed continuation of occupancy under the same conditions, as opposed to a renewal, which implies new terms or conditions. In a lease, it is a right granted by the landlord to the tenant whereby the tenant has the option to extend the lease for an ad.
~F~^Top
Fair Market Rent: The amount that a property would command if it were now available for lease. Fair market rent is defined in various ways and is subject to wide interpretation.
Features: The characteristics of a commercial listing that are beneficial to a buyer.
Fenced SF: The area of fenced square footage on a listing.
Flex Space: A building offering flexibility between office and other uses such as manufacturing, storage, etc. Typically provides high bays and flexibility for overhead doors and other entrances.
Franchise: A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area.
Free Rent: A concession granted by a landlord to a tenant whereby the tenant is exempt from paying rent for a predetermined time during the lease term.
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Gaming: A listing that has a license for gaming (gambling).
Grade Docks: Docks that allow for loading and unloading of commercial trucks to a building that have a gradient or inclination.
Gross Rent Multiplier: The sales price divided by the gross annual rental income.
Gross Square Feet: Refers to total area of a building, measuring from the outside of its exterior walls and including all vertical penetrations, such as stairways and basement space.
Gross Up: An adjustment whereby the building's variable expenses have been adjusted upwards to the level those expenses would be incurred if the building were fully occupied. This is typically 95%.
Ground Lease: A lease of land only, (either vacant or exclusive of any buildings on it). Usually a net lease on a long-term basis of 30 years or more.
~H~^Top
Hold Over: The condition that results when a tenancy exists beyond the end of the term of a lease.
HVAC: Heating, Ventilation, Air Conditioning. General terms encompassing any system designed to heat and cool a building in its entirety, as opposed to a space heater.
~I~^Top
Improvement Allowance: This amount is allocated to a tenant for improvements made to a building that will be left behind when they vacate. These improvements could be lighting, plumbing, bathrooms, etc.
Interest Rate: The cost of borrowing money, expressed as a percentage.
Inventory: Usually refers to a broker's group of listings.
Investment: A commercial purchase that is specifically bought with the expectation of monetary profit.
~K~^Top
Keyword Search: Searching listings by specific words, such "NNN" or "Business Opportunity" that helps refine things from the search that are irrelevant.
~L~^Top
Landlord (Lessor): The party (owner) who gives the lease in return for a consideration (rent).
Lease Expiration: The date a lease agreement is over.
Lease Rate SF Month: Price per month paid per square foot.
Lease Rate SF Year: Price per year paid per square foot.
Lease Term: The specific period of time in which the landlord grants to the tenant the right to possession of real estate.
Lease Type: The particular kind of lease offered on a property. These include "NNN", Flex, Full Service, etc.
Lessee (Tenant): The party to whom a lease (the right to possession) is issued in return for a consideration (rent).
Letter of Intent: Intent to proceed to a final agreement in good faith on agreed principal business terms of the deal being entered into. This meaning applies when executed by both parties. Such a document may be signed just by one party as an indication of willingness to enter into agreement on stated terms and conditions. It is often recommended that this letter includes a clause stating that there is not a specific offer and no intent to be a legally binding obligation. An obligation to continue to negotiate in good faith to conclusion can also be created.
License: A permit issued granting permission to do something, as in a Commercial Real Estate License.
List Price: The selling price of a particular commercial property.
Listing Space: The spaces offered in a particular commercial property.
Load Factor: In a lease, the load factor a number multiplied to a tenant's useable space that then accounts for the tenant's share of common areas (see above). The load factor is usually expressed in a percentage value. Subtracting one (1) from the quotient of the rentable area divided by the useable area obtains a load factor.
Lot Frontage: The full length of a plot of land or a building measured alongside the road on to which the plot or building fronts.
~M~^Top
Master Lease: A lease that controls leases to follow. For example: "A" leases an office building, containing ten offices, to "B". "B" subsequently subleases the ten offices individually. The ten subleases from "B" as sub-lessor are controlled by the lease from "A" to "B" (master lease).
Max Contiguous: "Maximum Contiguous Available" specifies the largest pocket of space that can be created by combining suites that are adjacent to each other in the building.
Min Divisible: The minimum size available of a total lease space.
MSA: Metropolitan Statistical Area.
~N~^Top
Net Op Income: Net Operating Income. The effective gross income from a property minus operating expenses.
NNN: See Triple Net.
Non-Disturbance: Provided a lease is not in default, the lessor will not disturb rights to occupancy under the lease.
~O~^Top
Occupancy Cost: Any cost or charge incurred by a tenant in accordance to its lease. Examples include rent, operating increases, parking, moving, remodeling costs, etc.
Office SF: The square footage of an office space.
Open Listing: Property leased directly by the owner. However, the owner can employ an in-house leasing agent. These are called open listings, where the owner pays full commission to any broker who brings a tenant to the property.
Operating Expenses: The cost of operating an office building, such as utilities, and other day-to-day expenses, including taxes, insurance, etc.
Operating Income: A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes.
Owner Home: The current owner of a property is at the premises.
Owner's Representative: An agent who is an advocate for the owner and/or landlord.
~P~^Top
Parcel Number: This is a unique number assigned to each parcel. Sometimes, when the parcel has been split, you will see a letter after the last three numbers.
Parking Ratio: The parking ratio is the ratio of parking spaces per 1,000 square feet of gross lease-able area (GLA).
Pre Tax: Amount earned before deducting income taxes.
Present Value: Amount that must be invested in the present to produce a known future value.
Principal: Balance of a loan that does not include interest.
Property Description for Client Viewing: Additional information about the property to be seen by clients. Appears on property reports printed to be sent to clients. Broker information is removed.
Property Description for Other Brokers: Additional information about the property to be seen by other Brokers. Appears on the site when a listing is searched. All information on broker and financials are available for viewing.
Property Name: Name of property listed.
Property Type: Type of classification for commercial real estate based on use. Examples; industrial, retail, office, and multi family.
~R~^Top
Raw Land: Unimproved land remaining in a natural state.
Raw Space: Unimproved shell space in a building.
Reasonable Consent: A standard clause in a lease (most often in a sublease) that limits the lessor's ability to withhold consent by sole discretion. If a reasonable person would give consent to an action given a set of circumstances, so must the landlord.
Renewal Option: The right of a tenant to renew or extend the term of a lease for a specific period of time at a rent to be determine.
Rentable Area: The square footage for which rent can be charged. Usually it is the gross area of the full floor vertical penetrations such as elevator shafts, stairwells, etc. Rentable area is usually determined according to BOMA standards.
Rental Rate: The amount of rent to be paid for occupancy and use of property. This is usually stated on square foot per month or a per year basis.
Request For Proposal (RFP): A document issued by a tenant's agent to the property owner, inviting the owner to submit a proposal to lease a vacant space. The outlines tenant concerns, such as the amount of space in question, lease term, renewal options, rent, and other allowances to be provided by the owner.
Right of First Offer or First Opportunity: A right, usually given by an owner to a tenant, which gives the tenant a first chance to buy the property or lease a portion of the property if the owner decides to sell or lease.
Right of First Refusal: A right given by an owner to a tenant, that gives the tenant the first chance to buy the property or lease a portion of the property if the owner decides to sell or lease. The owner would have a legitimate offer that the tenant can match or refuse.
Right of Offset: A lease clause whereby the tenant has the right to deduct from the rent certain costs due to the tenant from the landlord.
ROI: Return on Investment. Or return on invested capital: (corporate finance) the amount, expressed as a percentage, that is earned on a company's total capital, calculated by dividing the total capital into earnings before interest, taxes, or dividends are paid.
~S~^Top
Scheduled Gross: The rental rate of a property multiplied by the total rentable space.
Section: One part of the three identifiers that locate a listing: section, township, and range of a particular property. They can be found with the parcel identification number.
SF Occupied: The amount of square footage that is occupied by a tenant.
SF Rentable: The amount of square footage that is available for lease.
Show Pending Properties: Search with all listings that are pending in the search results.
Space Available: The amount of space available in a lease listing.
Space Pocket: A section of leased premises set aside to accommodate tenant's future growth. The space pocket is usually fully improved at the start of the lease and rent isn't due in the area until actual use, or until a specified future date.
Status: The current status of a listing: available, pending, closed, etc.
Sub-Category: A more specific search definition, such as Office-Medical.
Sublease: A lease under which the lessor is the lessee of a prior lease of the same property. For example: "A" leases to "B" for five years. "B" may sublease to "C" for three years, but not for six years. However, the rent can be greater or less than that in the original lease.
~T~^Top
Tenancy Type: Commercial or residential tenants.
Tenant (Lessee): A holder of an interest in property for a specific term under a lease or other rental agreement.
Tenant Improvements (TIs): Improvements to land or buildings to meet the needs of tenants. May be improvements or remodeling and are paid for by the landlord, tenant, or both.
Tenant Representative: An agent who is an advocate for the tenant. The relationship is most often the product of a signed representation agreement.
Township: One part of the three identifiers that locate a listing: section, township, and range of a particular property. They can be found with the parcel identification number.
Triple Net: A lease requiring the tenant to pay the expenses of the property leases, such as taxes, insurance, utilities, cleaning, etc. The terms "net net," "net net net," "triple net," and other such repetitions are used.
Turnkey: Referring to an owner making a property ready for a tenant by having the tenant furnish just such things as phones, furniture, and inventory. Turnkey improvements are provided at the lessor's expense according to plans agreed upon by both parties. Lessor bears the risk of construction in a turnkey situation.
~U~^Top
Unit Information Description: The characteristics and benefits of a particular unit.
Useable Area: The secured area (square footage) occupied exclusively by tenant within a tenant's leased space. The useable area times the load factor for common area results in rentable area on which rent is charged. Useable area can be measured in many ways, but the most common measurement for office buildings is according to BOMA standards.
Utilities at Site: The various utilities available on a particular listing.
~V~^Top
Vacancy Rate: The percentage of all units or space that is not leased, not rented or is unoccupied.
Value Engineering: Process by which costs can be decreased, or benefits can be added to an undertaking, or project through redesign, prioritization, or other similar actions.
Vertical Transportation: Elevators, stairs, or escalators moving people or freight between floors in a building.
~W~^Top
Warehouse Cooling: The type of cooling used in a warehouse.
Warehouse Heating: Type of heating used in a warehouse.
Warehouse Percent: Percent of a property that is utilized for warehousing.
Well Dock: A ramp and/or level area below ground level which creates loading at truck height.
Work Letter: Specifications for TIs attached to a lease or letter of intent provides the basis for working drawings and contractor pricing, and can allocate costs between the parties. Also establishes critical dates for approval of drawings and processes.
Working Drawings: Drawings prepared by a licensed architect and used by contractors in the construction of TIs. Outlines all architectural detail such as electric, doors, plumbing, cubicles, etc.
~Y~^Top
Year Built: Year the property was built.
~Z~^Top
Zoning: An act of the city, or county authorities by exercise of police powers in regulating, controlling, or specifying the type of use to which the property may be put in specific areas.