Ad Valorem.   A term typically used when referring to property taxes they are based  according to the government’s valuation of the property. “ According to Value”.

 

After Hours Usage.  Tenant’s need for additional working hours beyond the normal operating hours for the building as set forth in the lease.  Typically if tenant requires after hour utility usage, he will pay an additional agreed upon fee.

 

Air Conditioning.  Also referred to as HVAC.  The state of temperature and humidity produced by an air conditioner.  A air cooling machine.

 

Air Rights.  Control of the skies above a property.

 

Allowance Over Building Shell.  This usually occurs  during the pre-construction phase of a building it’s purpose is to control or caps the Landlord’s exposure at a fixed amount of dollars over the negotiated price of the base shell space of the building. 

 

Alteration.  To change something.

 

Amenities.  Attractive features of a property such as a coffee shop, health facility, conference rooms, covered parking, etc.

 

Amendment.  A document negotiated after the original lease is in affect, changing or adding items to the original lease.  This document is to be attached to the signed original lease and now becomes part of the lease.  Items addressed in an amendment supersede the item being replaced in the original lease document.

 

Americans with Disabilities Act (ADA).    This is Federal legislation that was passed in 1990 requiring employees and business owners to make “reasonable accommodations” to facilitate the employment of the disabled.

 

Amortization.  Represents periodic payments of principal and interest to be paid back over the term of a loan

 

Anchor Tenant. The main Tenant of the building.  i.e  A Bank, an Insurance Company, a  “Fortune Five Hundred Firm.”  I n many cases it would be the Tenant who is given naming/signage rights to the building. 

 

Annual Bumps.  Slang for annual increases is such items as rent or operating expense increases.

 

Annual Fixed Rent.  Rent does not change from year to year.

 

Annual Operating Expense Increase/Overages.  A charge passed on to the tenant representing the tenant’s proportionate share of building operating expense costs greater than the amount agreed upon in the original lease; (referred to in lease as Expense Stop, or Base Year Expenses)

When the owner refers to the building’s expense stop as $4.50, this simply means that the first $4.50 of building operating expenses are being paid by the building.  If the building operates at a higher rate, let’s say $5.00 per square foot, you will pay the difference between the $5.00 and the $4.50, or an additional 50 cents per square foot.  When an owner quotes you on the Base Year basis, he is saying that you will pay the difference between the amount the building operated at in the base year addressed in your lease and the current operating expense cost.  An example would be “Base Year of 1995,” let’s say the building operated at $6.00 per square foot, in 1995 and operates at $6.50 in 1996, you would pay the difference of 50 cents per square foot in 1996.

 

Annual Percentage Rate or APR.  Reflects the annual cost of a loan.  It includes the interest, loan origination fees, discount points and other costs that will be paid to the lender.

 

Annual Rental Rate.  The cost per square foot that the landlord is quoting or receiving in rent.  i.e. $14 per square foot.  Sometimes quoted in annual dollar amounts i.e. $14,000 per year.

 

Anticipatory Breach.   A breach of contract committed prior to the time of required performance.

 

Appurtenant.  A right, privilege or a property that is considered incident to the principal property for purposes such as passage of title, conveyance or inheritance.

 

Applicable.  Something that is relevant or appropriate.

 

Appraisal.  The estimation of an opinion of value given on a property..  An appraisal of property is to be based on factual information given by a qualified professional appraiser.

 

Appreciation.  An increase in the value of the property.

 

Approximate Operating Expenses.  The expenses that have been estimated prior to the true figure being made available.

 

Approximate Square Footage.  An estimated amount of space being stated. 

 

Approximately.  An estimate, somewhere near the correct figure or statement.

 

Arbitrate.  To act between parties with a view to reconciling differences.

 

Arbitrator.  A person chosen to settle the issue between parties engaged in a dispute.  One having the ability or power to make authoritative decisions..

 

Arbitration.  The process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision..

 

Arbitration Bond.  A bond which is generally entered into by parties wishing to submit their differences to arbitration.  

 

Architect.  Someone who creates plans to be used to build something, such as buildings.

 

Arms Length Transaction.  A transaction in which the buyer and seller act independently of each other and have no relationship to each other.

 

Asbestos.  Chemical resistant fibrous mineral forms or pure magnesium silicate, used for fireproofing, electrical insulation, building materials, brake linings and chemical filters.  Inhaling fibers can cause asbestosis or lung cancer.

 

Asbestos Dangers. When asbestos is in good condition it is not an immediate risk (but should be monitored). 

 

Asbestos particles are dangerous when asbestos becomes “friable,” (meaning that it can be easily broken apart by hand ) then the microscopic particles become airborne and can enter the lungs.  Because of their size and shape, the particles remain airborne for a long time and are easily ingested into the lungs or stomach.  Therefore older fraying asbestos, or damaged asbestos is particularly dangerous.

 

As-built  Term used for the blueprints or original plans for a particular building or something that was built according to a given set of plans.

 

As-Is Condition. The buyer or lessee will accept the space or property in its current condition, with no improvements, including all defects.

 

Asking Rent  The lease cost per month or per year of the space that is being quoted by the owner.

 

Assessment.  The estimated value of property in order for a governmental fee to be imposed such as taxes or area improvements.

 

Asset Management.  Another term used for property management. 

 

Assignment of Lease.  Is the transfer of all responsibilities and liabilities of the lease from one party to another.

 

Atrium.  An opening in the center of a building, often containing plants, fountains, skylights and other features.

 

Attachment.  Is a legal solution to collecting a debt.  The court will sometimes issue a “Writ of Seizure,” on a property owned by the alleged debtor in order to

secure the property in case a judgment is rendered against the debtor so the property may be sold to satisfy the amount of money called for by the court’s judgment.

 

Attorney.  A person legally appointed by another to act as his or her agent in legal transactions specifically one qualified and licensed to act on behalf of plaintiffs and defendants.  Attorney’s are licensed to give legal advice as well as draw up legal documents, agreements etc.

 

Atonement.  The turning over of things of value such as money or property to a new owner.

 

Audit.  The inspection of records to assure accuracy.

 

B

 

Balance Sheet.  A statement of business or institution that lists the assets, debts and owner’s investment as of a specific date.

 

Bankrupt.  Having been legally declared financially insolvent.  Financially ruined impoverished.  Depleted of valuable qualities or characteristics.

 

Bankruptcy.   This is when a Federal court under Federal Bankruptcy statutes  relieves the debtor, who has been declared bankrupt, of overwhelming debt. under federal guidelines the debtors properties, with certain exceptions, would be distributed to its creditors as full satisfaction of  their debt.

 

Base Rent.  Is the rate at commencement of the lease.  It is subject to annual increases unless otherwise negotiated in the lease or Addendum or an attached amendment.  This phrase has more than one meaning.  To some landlords, and in some markets it refers to the rental rate minus operating expenses.,  i.e. $14 per square foot quoted rate, the building operates at $6.50 (operating expense cost); therefore, the base rate (net rent) is $7.50.

 

Base Year.  The year a Tenant’s Base Expenses Increases are set on.

 

Base Year Operating Expenses.  The cost the owner is paying to cover the cost of operating the building in a given year.  i.e.  Base Year 2006 expenses would reflect the cost to operate the subject building in 2006.  In subsequent years you would pay the difference in the amount it costs to operate the building, based on the percentage of the building you occupy.

 

Base Year Stop. The amount set by the Landlord, that the Tenant’s Base expenses will begin at.

 

Bedroom Community  A residential area

 

Bay Depth.  Represents the distance from the building’s corridor wall to the outside window of the building.

 

Big Box.  Retail terminology which generally refers to a large space tenant.

 

B.O.M.A.  Refers to The Building Owners and Manager’s Association.  An International Organization made up of Building Owners, Building Managers and suppliers of the same.  Because of its size and influence the organization establishes a variety of recommended guidelines, such as the B.O.M.A. method of measurement.

 

B.O.M.A. Method of Measurement.  Is generally accepted throughout the office building industry as the standard and fair method of measuring office space. Some landlords use other methods, including their own.  To determine the Usable area of your space, you must measure from the inside finished surface of the corridor wall and the dominant portion of other permanent walls (dominant portion of exterior walls, i.e. could be glass) to the center of the wall that separates your office from the adjoining office.  Columns and interior walls should not be deducted from the measurement.  To determine the Rentable area of your space, you must first determine the rentable area of your floor.  This would be accomplished by measuring the inside finished surfaces of the outer building (might be outer glass to outer glass that makes up the exterior walls of the floor).  Remember it’s length times width equals square footage.  When measuring, exclude any “vertical penetrations” such as stairwells elevator shafts, flues, vertical ducting etc. before you determine the Usable area of that floor.  This would be accomplished by taking the rentable measurement and subtracting areas of common use to the tenant, i.e. corridors, restrooms, utility closets, janitorial closets and building amenities located on that floor, such as a common conference room.  To determine your rentable area, usable area and common area factors apply the following conversion formulas:

 

                             Rentable area divided by Usable area = Rentable/Usable Ratio.

 

                             Usable area times Rentable/Usable Ratio = Rentable Area.

 

                             Rentable Area divided by Rentable/Usable Ratio = Usable Area

 

Bond.  A document given to assure the recipient against loss from non-payment of a debt..  See Surety Bond.

 

Breach of Warranty.  Occurs when the owner of the property (seller) fails to convey title of ownership of the property as expressed in the contract.

 

Broker.  One who acts as an agent for others as in negotiating contracts, or sales in return for a fee or commission.

 

Brokerage Commission.  A pre-determined fee paid to the broker for services rendered.

 

Buffer.  An items i.e. wall, shrubs, fences or a strip of land set up between properties to establish property differential or property lines.

 

Building Amenities..  Features of the building that add to the comfort of the tenant while in occupancy.  i.e., coffee shop, health facility, covered parking, break rooms, conference rooms, Fed Ex Machines, UPS Machine, etc.

 

Building Classifications.  Building classification are in the eye of the beholder or the community. There are times when a properties deemed  “Class A” in one market would not be, “Class A” in another.  Example; a major developer uses a very high quality floor plan to design a building for  a major market, it’s a class A in that market.  Now he takes the same plan and eliminates some of the high end amenities while building a similar building in a smaller market, it’s now a “Class A” building in the smaller market but it may not be considered a Class “A” when put up against the Original with all the “Bells and Whistles.”  Please see “Class A”, “Class B”, “Class C” and “Class D” buildings.

 

Building Codes.  A set of laws enacted by the local governmental authorities, regulate the operation of buildings within their jurisdiction.

 

Building Data.  Tenancy information on a particular building or property

 

Building Engineer.  An individual usually qualified to oversee all of the day to day physical challenges of the Building, its equipment and its Tenants. 

 

Building Improvements.  Any improvements being made to the overall appearance or comfort of the building.  i.e.  new carpeting, painting, upgrade of elevator cabs, etc.

 

Building Leasing Agent.  This person could either be an employee of the Building Owner or a Broker with an outside Brokerage firm charged with leasing the Property and keeping it full at the highest market price.

 

Building Manager.  An individual hired by ownership to oversee the day to day operation of the Property.  Sometimes they will be onsite sometimes not.

 

Building Maintenance.  Could be a qualified building engineer or just an individual handy man charged with keeping the physical and mechanical aspects of the property going.

 

Building Operating Hours.  The normal hours of operation for the building, as set forth in the lease.

 

Building/Owner’s Representative.  A leasing agent that either works directly for the owner or who works for a third party hired by the owner to lease and negotiate lease transactions in order to fill the building with tenants at the highest market price possible.  

         

Building Permit  An official certificate of permission to build issued by the local governing body.

 

Building Rules & Regulations.  A list of Do’s and Don’ts for the Tenants of  a property.  These are usually attached to the lease as an Amendment (At the back).  It’s important that you review them thoroughly before signing a lease to insure that you or your business can comply with them, if not you may find yourself unintentionally in default of your lease.

 

Building Site  A lot on which there are no permanent buildings.

 

Building Standard.  Refers to the items covered in the building’s construction work letter, defining the items necessary to create a standard office space.

 

Build-out.   Refers to the construction of the tenant’s proposed space, to make it ready for occupancy, or to comply with tenant’s construction needs according to the terms and conditions of the lease. Also referred to as T.I. (Tenant Improvements)

 

Build-out Time.  The amount of time it takes from commencement of construction until the space is ready for the tenant to occupy.

 

Build to Suit.  Is the build-out of space according to the tenant’s established guidelines.

 

Burn-down.  A property that has experienced a devastating fire and most likely will not be salvaged.

 

Business Broker.  A broker or Agent who specializes the purchase and sale of businesses.  Not always the real estate.

 

Business Park.  A location where a number of company offices and light industrial structures are erected.

 

Buy Out.  The ability to pay money or something of value in order to be released from the obligations of a lease.

D  

 

Date of Lease.  Is the date the lease has been executed by both the tenant and the landlord.

 

Debt Service.  Cash required over a period of time for repayment of interest and principal on a debt..  The monthly mortgage payment.

 

Deed.  A document conveying ownership.

 

Deed In Lieu of Foreclosure.   Occurs when a property owner turns over the deed to the property to the lender or lien-holder to avoid foreclosure proceedings. 

 

Deed of Trust.   When a property is placed under control of a Trustee as opposed to the actual owner.  Could be done under the provisions of a loan or court order.  The property’s deed  usually reverts back to the owner once the debt is paid.

 

Default.  Non-performance under the terms of the lease.

 

Defeasance  A clause within a contract providing for annulment.  To make null or void.

 

Defect.  An imperfection or lack of something necessary for completion

 

Delivered Building.  Completion of construction of a building and it’s ready for Tenants.

 

Demised Premises.  A portion of an entire property which is leased to a Tenant.

 

Demising.  Splitting a parcel of real estate by erecting a wall or a line.

 

Demising Wall.  A common wall that separates two tenants or separates a tenant from the common areas of the building.

 

Demographics.  The characteristics of human populations and population segments ,especially when used to identify consumer markets.

 

Density.  Thickness of consistency, impenetrability. complexity of structure or content.

 

Depreciation.  A decrease in property value.

 

Detention Area  a dry bottom area of land which provides for the temporary storage of storm-water runoff.

 

Detention Pond  a body of water designated by design to catch storm water runoff.  

 

Developer.  A person who develops real estate, especially by preparing a site for residential or commercial use..

 

Direct Enforcement. The ability to look directly to the party to insure performance or satisfaction of an agreement i.e. personal guaranty.

 

Discrimination.  Treatment or consideration based on class or category rather than individual merit; partiality or prejudice.

 

Distress Sale.   The act of selling a property under undesirable conditions, usually financial difficulties.

 

Distribution.  The act of dispersing or allotting.

 

Distribution Center.  An area or location from which products are dispersed.

 

Distribution Facility.  See distribution center.

 

Dock.  A platform at which trucks or trains unload material

 

Dock High.  A raised platform  

 

Dominant Portion.  A feature that makes up more than 50% of the inside surface of a permanent wall.

 

Due Diligence.  The process of investigation usually carried on by a disinterested third party on behalf of a party contemplating a business transaction, i.e. a corporate acquisition or merger, loan of finances, or a purchase of property.

   

 

        E

 

 

Earned Commission.  The amount of money paid to a licensed broker or real estate agent for completion of a sale, lease or other real estate transaction.

 

Earnest Money.  This is also referred to as “Good Faith Money,” its purpose is to make an agreement a binding document.

 

Easement.  The right given to another party to either use a portion of or to cross the property freely.

 

Ecology.  The study of the detrimental effects of modern civilization on the environment, with a view toward prevention or reversal through conservation.

 

Economic Feasibility.  Does the property make sense in terms of income and use.  

 

Economic Rent.  An analysis used to determine the property’s market rent.

 

Effective Rate/Rent.  Would be the overall average of your rate, taken through the entire term of occupancy.  This would take into affect annual increases.  i.e   A rate quoted at $14 per square foot, on a five year deal with annual increases of 4% would be effectively a $15.17 deal. 

 

Efficiency.  A term used when describing the building’s common area factor, sometimes used to describe how well the building is being run as reflected in lower operating expenses.  

 

Efficiency rate  an indicator which reflects how well a building is being run. Another term used to indicate the common or load factor of a building.

            Egress.  The act of going out.  An exit.

 

Electrical Closet.  A small room in which electrical equipment is stored. 

 

Electrical or Utilities.  When referred to in a lease, it reflects a cost that is either being paid separately by the tenant under a net or triple net lease, or a cost that is included under the full service or gross lease.

 

Eminent Domain.  A method used by the government to acquire property, by condemnation without having to get the owner’s consent.  The owner is compensated for the property.

 

Encroachment.  Refers typically to a property use or structure extending over someone else’s property line.

 

Encumbrance.  A burden or impediment.  A lien filed against a property.

 

Enforcement.  The act of insuring observance or obedience. 

 

Enforceability.  To compel or impose obedience to Engineer.  One who applies engineering skills to solve problems.  Usually works in conjunction with an architect and planner on buildings and other commercial properties.        

 

Entity.  Something that exists as a particular or discreet unit.  Persons and corporations are equivalent entities und the law.  The existence of something considered apart from its properties.

 

Entitlement.  To assign or appropriate as by giving a title.  To give a claim or a right to.            

 

Environmental.  Relating to or being concerned with the ecological impact altering the environment.

 

Environmental Impact Study.  Usually a study done to indicate what kind of environmental effect the project or property will have on the immediate surrounding area.

 

Environmental Laws.  Laws enacted for the purpose of  protecting  the environment.

 

Equity.  The residual value of a business or property beyond any mortgage thereon and liability therein. 

 

Equity Participation.  The participation by the lender in an active ownership position with the property.

 

Escalation Clause.  The clause in the lease that addresses the increases to be passed on to the tenant during the life of the lease.

 

Escrow Agreement.   An agreement between  Buyer and  Seller indicating that a deposit for the purchase of a property will be placed in an escrow account, sometimes with an attorney or a Broker  it also defines the terms and conditions of how this money will be held and ultimately distributed if property does close or does not close.

 

Estoppel Certificate.  Is a document signed by the tenant stating the current condition of the lease and any other agreements between the landlord and tenant as true.

 

Ethics. A set of principles of  right conduct.  A theory or system of moral values  

 

Evict.  To put out by legal process.

 

Eviction.  See evict.

 

Exchange.  To give in return for something received.

 

Exclusive Agreement.  An agreement between and owner and a brokerage firm which states the broker will be the sole representative in marketing the property for sale or lease or to manage this property.  In return the owner promises to compensate the broker by paying a commission or a fee, according to the terms and conditions of this agreement.

 

Execute.  To make valid by signing.

 

Executed Agreement.  An agreement that has been signed. 

 

Exempt.  To free or permit to be free from any service charge, burden, tax, duty, requisition or evil to which others are subject.

 

Exhibit.  Is an attachment to the lease.

 

Expansion.  Refers to the transaction involved for a tenant to add additional space to his existing leasehold space.

 

Expenses.  something requiring the expenditure of money. 

 

Expense Stop.  Is an established dollar amount towards operating expenses of the building that the landlord is willing to pay.  The tenant will be required to pay his proportionate share of any costs over and above this set amount.

 

Expiration.  The act of coming to a close.  The termination of a contract.

 

Extension Option.  The right given by the Landlord to the Tenant under the terms of the lease to extend this lease document for an additional period of time

 

Exterior Wall. The outer or external wall.

 

F

   

Face Rent.  The asking rent.

 

Fair Market Value.    This is the price that the property would most likely bring in today’s market.

 

FAR. . Florida Association of Realtors

 

Feasibility Study.  A Study conducted on a certain location to determine, by analyzing items such as costs vs revenues to conclude when or if a property should be built.

 

Fee Simple.  An estate in land in which the inheritor has unqualified ownership and power of disposition.  The owner of the property has the right to do whatever he or she wants with the property within established zoning and governmental guidelines.

 

Fiberglass.  A material consisting of extremely fine fibers, used in making various products such as yarns, fabrics, insulators, and structural objects or parts.  A covering material made of glass particles in resins.  If inhaled this material can be extremely hazardous.

 

Finance Charge.  Costs typically added to a property loan such as interest, points and other loan fees.

 

Fiduciary.  Of or relating to holding something in trust for another..

 

Financial Center.  The part of a city where financial institutions are centered.

 

Financial District.  See financial center.

 

Finished Surface.  Highly polished surface or one that has been finished with a great deal of skill..

 

First Mortgage.  A real estate loan with the right to payment in full before payments to other lenders are made. . 

   

First Right of Refusal.  A right given to the tenant that states that before the landlord will lease the space in question, (usually expansion space), the tenant will be given the right to lease it first.

 

Fixed Costs.  Costs that remain constant. 

 

Flat Lease.  A lease that calls for no increases either in rent  for a set period of time.

 

Flex Space.  Sometimes referred to as office/showroom space.  It consists of some office but mostly warehouse space.  The rate is usually lower than typical office space and higher than Warehouse or industrial space.  The rate is usually quoted as NNN triple net, or modified gross.  See NNN or Modified Gross Leases.

 

Flood Plain.  The area adjacent to a river that is vulnerable to flooding if the river were to overflow its banks.

 

Floor Area Ratio.  To arrive at this figure you must divide the gross square footage of the building by the square footage of the land.  This would give you the ratio of the overall area of the building to the land on which it sits..  It is sometimes identified as FAR.

 

Floor Load Capacity.  The amount of weight a floor in a building is safely  capable of sustaining, per square inch.

 

Footprint.  The surface space occupied by a structure or the area taken up by some object.

 

Force Majeure.  A fierce or overpowering force.  An unexpected or uncontrollable event..  .

 

Forbearance Agreement.  An agreement which would disallow a party to pursue the enforcement of something such as a debt, a right or an obligation that may be due them.

 

Foreclosure.  Action usually taken through the courts  to take away all rights of ownership from the current owner, in order to satisfy a lien on the property.

 

Free Parking.  Spaces allotted to park your vehicle that you don’t have to pay for.

 

Free Rent.  A period of time given to the tenant by the landlord to occupy the space before having to commence paying rent.  Usually done during soft periods in leasing when the market is referred to as a “ tenant’s market.”

 

Full Service Lease.  In some markets referred to as a “gross lease,” is meant to cover the cost of rent, electricity and janitorial service.  Does not include phones or furniture, moving etc. BEWARE sometimes this term is used when referring to a “ modified gross lease.”

 

Fully Executed Agreement.  An agreement or document that has been agreed to and signed by all parties.

 

Functional Design.  A plan affording a user maximum efficiency from their space.

 

Future Proposed Space.   Projects that have been announced but have not yet begun construction.  As proposed the property may or may not eventually happen.

 

G

 

General Contractor.  The individual or company that coordinates all construction work, oversees the construction and hires and is responsible to pay all sub-contractors.

 

Generalist.  One who has broad general knowledge and skills in several areas.

 

General Partner.  A partner in a business who has unlimited liability..

 

Graduated Lease.  A lease with pre determined rental payments sometimes referred to as a stepped lease.

 

Grade Level.  Level with the ground.

 

Grant.  To transfer property by a deed.. 

 

Grantee.  One to whom the grant is made.

 

Grantor.  One that makes a grant.

 

Gross Absorption.  Please check “Absorption Rate”

 

Gross Acreage  The entire area of a parcel of real estate or a building site expressed in acres.

 

Gross Building Area.  The gross measurement of the building done by measuring the outside walls. Also referred to as the gross square footage of the property

 

Grossed Up.  The end result when everything is included and added up.

 

Gross Lease.  The type of lease that as all inclusive.  The tenant pays rent, the owner pays all expenses related to the property.

 

Gross Rent.  Sometimes referred to as full service rent.  It is rent that covers all costs.

 

Ground Lease.  Sometimes referred to as a Land Lease.  This is a lease written on the use of the land only.

 

Ground Rent.  Is the fee or rent being paid on the unimproved land only. 

 

Guarantee.  A promise or an assurance especially one given in writing that assures the payment of one’s debts. 

 

Guarantor.  The one who has assumed responsibility for payment of the It could be personal or corporate.

 

 

 

 H

   

Hard Money/Hard Dollars.  A predictable stream of income.  Funding that is repetitive not a one time grant or gift..

 

Hallway.  A corridor in a building

 

Hazardous Materials.  Dangerous goods, flammables, hazardous waste.

 

Hazardous Waste.  Substances such as nuclear waste, industrial byproducts, that is potentially damaging to the environment and harmful to humans or other living organisms.

 

Highest and Best Use.  The best use for the property that would return the most profit to the property owner.

 

High Rise.  A multi story building equipped with elevators.  In most cities it is a building considered to exceed ten (10) stories in height.

 

Hold Harmless.  Of relating to or being an agreement between parties in which one assumes the potential liability for injury that may arise from a situation and thus relieves the other of liability.

 

Holding Over.    Remaining in a leased space beyond the agreed upon term of the lease.

 

HVAC.  Heating, ventilation and air conditioning.

 

 

 

I.

           

Impact Fee  A special or additional fee imposed by a community on a development or a business  reflecting its impact on the area with respect to  items such as traffic or traffic flow, utility use effect on the environment, etc.  

 

Improved Value.  Terminology used when appraising the value of the entire  property, both land and any improvements.  This is done as opposed to valuing   all items separately.

 

Improvements.  Changes or additions that improve.

 

Incentives.   Rewards that induce action.  Such as free rent, more money contributed toward tenant build-out of space.

 

Income.  The amount of money or its equivalent received during a period of time in exchange for labor or services or goods or property or the return on a financial investment.

 

Income Producing Property.  A property that generates an on-going income for the owner. 

 

Income Statement. A financial report that-by summarizing revenues and expenses and showing the net profit or loss in a specific accounting period-depicts a business entity or property’s financial performance due to operations as well as other activities rendering gains or losses.  Also known as the “Profit and Loss Statement.” Or “Statement of Revenues and Expenses.”

 

Incorporated Provisions.  Combined provisions.

 

Indemnification.  A sum of money paid in compensation for loss or injury.  An act of compensation for actual loss or damage or for trouble and annoyance.

 

Indenture.  A deed or written document between two or more parties.

 

Indirect Costs.  These typically are support costs such as administrative, financing or property taxes, as opposed to costs such as direct labor or direct purchase of materials for your use. 

 

Inflation  A persistent substantial rise in the general level of prices related to the increase in a volume of money and resulting in loss of value of currency.

 

Inflationary Increases  Increases in rent or operating expenses/CAM passed on to offset the cost of inflation.

 

Ingress.  The act of going in.  An entrance

 

Installment.  One of a number of successive payments in settlement of a debt. 

Insurance.  Coverage by a contract binding a party to indemnify another against a specified loss in return for premiums paid.

 

Interest.  A charge for a loan usually a percentage of the amount loaned.  

 

Invalidate.  To nullify.

 

Inventory.  Is a term used reflecting the amount of space available within a given market.

 

Invitees.  Guests

 

Involuntary Conveyance.   When the ownership of property is conveyed by a decree or through force, i.e. condemnation.

 

  

J

   

Janitorial.  The maintenance or cleaning of a building..

 

Janitorial Closet.  A small room where janitorial supplies and equipment are stored.

 

Janitorial Service.  A group or company hired to clean, dust, empty trash etc.

 

Judgment.  The final decision or ruling of the court in a legal case.

 

Judgment Lien.  A lien placed on a property to secure the payment of the judgment.  See involuntary conveyance. 

 

Judgment Mortgage.  This could be a second mortgage on a property.  It is a mortgage which is secondary to the first mortgage but by being foreclosed could not eliminate the fact that the debtor still must pay the first mortgage.

 

Just Compensation.  The amount of money paid to an owner in cases such as condemnation of a property.

 

 

 

 

 

L

 

Landlord.  One who owns, rents and controls a property.

 

Landlord’s Lease.  A lease written that is weighed to the advantage of the Landlord.

 

Land Lease.  Sometimes referred to as a ground lease.  This is a lease signed on use of the land or ground only.

 

Landlord’s Lien.  This is a lien that is created upon signature of the lease by the Tenant.   

 

Landlord’s Market.  An office market showing strong signs of being favorable to the landlord.  Typically a market that’s experiencing strong leasing activity, and doesn’t have a lot of available space. 

 

Landlord’s Warrant.  This gives the landlord the right to lien a tenant’s personal property and the right to sell it to collect delinquent rent.

 

Land Planner.  One who assists in determining the highest and best use for a property.  Most commonly used in conjunction with commercial real estate transactions.

 

Latent Defect.  A defect that is not discoverable by reasonable or customary inspection.

 

Late Payments.  Payments that are received after a pre agreed upon due date.

 

Lease.  The legal agreement between the Landlord and Tenant setting forth the rules and conditions for occupancy by the tenant and limitations of the landlord.

 

Leasable Square Footage.  The amount of space in the building or within the Tenant’s space once the common area or load factor has been added to the usable measurement.  It is typically the amount of square footage your rental rate is based on.  Usable square footage plus the building’s load factor equals the leaseable square footage. 

 

Lease Commencement Date.  The date that the lease begins.

 

Lease Expiration Date.  The date when the lease expires, according to the terms and conditions set forth in the lease.

 

Lease Extension.  An agreed upon period of time, between landlord and tenant that he lease term can be extended. 

 

Lease Option.  The right that is given to a tenant as part of the lease document to do something specific in the future within the building or on the landlord’s property.  i.e the option to expand into a given space, the option to renew or perhaps the option to buy..

 

Lease Proposal.  A presentation, usually written of the proposed lease terms and conditions for the prospective tenant’s occupancy.

 

Lease Term.  Number of months, or years the agreed upon lease will remain in force.

 

Leasehold Improvements.  Also referred to as Tenant Improvements.  These are improvements that are made to a space by or for the Tenant to prepare for their occupancy.   

Leasing.  The act of granting someone temporary use of a space for a   pre determined amount of money under the control and direction of a signed legal  document called a lease or rental agreement. 

Leasing Agent.  The individual assigned the responsibility, usually by the building owner to lease up the property.

 

Legal Description.  A description of real property that is acceptable in a court of law.

 

Legal Fees,  A fee paid for legal services.

 

Legal Owner.  The person or entity that holds  Title to the Property.                            

 

Lender.  One that lends money or extends credit . 

 

Lessee.  The individual or company leasing space from the owner or the Landlord.

 

Lessor.  The individual or building owner leasing space to another party. 

Letter of Attornment.  A letter sent to a Tenant directing them to send the rent to a different entity than called for in the lease document, usually the new owner.

 

Letter of Credit.   A pledge or a commitment made by a lender or other party at the request of a party to honor drafts or any other payment.

 

Letter of Intent.  A lease proposal, with an acceptance signature block for both parties.  It may or may not be legally binding, depending on the statements in this agreement.

 

Lien.  An encumbrance against personal items such as property for money.

 

Lien-holder.  The Mortgagor or other creditor who has a lien on the property.    

 

Lien Waiver/Waiver of Lien.  A document usually signed by contractors waiving their right to lien the property.

 

Light Manufacturing.  The art or craft of making or processing goods on a smaller and cleaner scale than a full manufacturing facility.

 

Like Kind Exchange.  See 1031 Exchange.

 

Like Kind Property.  Terminology used primarily for tax purposes.  It refers to properties that a similar for tax purposes. 

 

Limited Partnership.  A limited partner is a partner who’s participation and liability in the partnership are limited.  The General partner makes the decisions while a limited partner will contribute money but make no decisions usually their only liability is the amount of money they have invested into the partnership.

 

Listing Agent.  The Individual who has been given the  responsibility to sell or lease a given property.

 

Listing Agreement.  An agreement between a property owner and a broker giving the broker the right to sell or lease the owner’s property in return for compensation.

 

Load Factor or Loss Factor.  Also referred to as common area factor.  It’s the difference between the rentable and usable square footage in the building.

 

Lobby.  A hall, foyer or waiting room at or near the entrance to a building.

 

Long Term Lease.  A lease that usually exceeds a term of ten (10) years.

 

Lot.  A parcel of land

 

Low Rise.  Varies from  market to market but this is usually a building from one story to about seven stories.

 

Lump Sum Contract.  A Contract submitted by a contractor stating that this is what it’s going to cost to build your project any costs over the amount bid by the contractor, excluding changes caused by the owner, would be absorbed by the contractor. It also allows the contractor to keep any profits over an above the contract amount.

 

   

 

M

   

MAI. A professional designation, “ Member of the Appraisal Institute,” as conferred by the The American Institute of Real Estate Appraisers.

 

Maintenance.  The care and upkeep of the property.

 

Maker.  The one who signs or executes a mortgage note.

 

Management.  Those responsible for over-seeing the day to day operation of the property..

 

Manager  An individual responsible for overseeing the day to day operations of a property, a company, a group of people or project.

 

Manufacture.  To make or process into a finished product especially by means of a large scale industrial operation.  To make or process through use of industrial machines.

 

Market.  A geographic region considered as a place for sales.  A sub-division of a market considered potential buyers.  Also means to offer for sale or lease.

 

Market Analysis.  A study reflecting various conditions of a given market.

 

Market Data.  Information gathered through researching income producing properties in a given market .

 

Market Indicators.  Statistical data pinpointing particular reasons for affect on a market.

 

Marketing Package.  Items compiled to sell the property or product in the market to potential buyers. I.e brochures, site plans, maps etc.

 

Marketing Plan.  A strategy created to sell to potential buyers.

 

Market Price.  The price a property gets in a certain market

 

Market Rate.  Price that is generally acceptable for a particular product within a given market.

 

Market Rent.  The amount of rent the property would most likely attain on the open market.

 

Market Research.  See Market Study. 

 

Market Standard Clause.  A clause in an agreement that is quite common and is generally deemed acceptable through-out a given market. 

 

Market Study.  A forecast of future demand as well as a report of present and past conditions of a given market.  

 

Market Survey.  A study of vital statistics from various properties effecting a segment of or the market.

 

Marketable Title.  A title on a property that is ready to be marketed to a given purchaser for the property.

 

Market Time.  The amount of time typical to complete a transaction in a given market.

 

Market Value.  What a property is most likely worth in a given market if put up for sale.

 

Master Lease.  This is a primary lease which is written to cover more property and details than most leases or dictates how future leases will be written on a property or group of properties.

 

Master Plan.  A comprehensive plan created by a governmental entity, i.e. a city or county which maps out a future growth pattern for the community.  See Site Plan. be doctors, dentists, labs etc.

 

Metes and Bounds.  A term not commonly used anymore but metes refers to distance and bounds refers to direction.

 

Mid Rise.  A building that falls somewhere between the hi-rise and low rise.  This varies from market to market but a Mid-rise buildings is usually somewhere between 4 – 10 stories in height.

 

Mixed Use Building/Development.  Also referred to as a multi-tenant building.  Tenancy is made up of more than one tenant in various businesses.

 

Modification.  A small alteration, adjustment or limitation.

 

Modified Gross Lease. In an office lease this is sometimes a lease where the tenant pays rent and included are all costs related to the operation of the building, except the tenant pays his proportionate share of operating expense overages.  When used in conjunction with Flex Space/Office Showroom space it usually means that the tenant’s rent will cover one of more of  the following expenses but not all of them, be sure to ask to define their lease in depth:

                                Real Estate Taxes

                                Landlord’s Insurance Cost

                                Utilities

 

Monthly Fixed Rent.  Rent that doesn’t increase on a monthly basis.  

 

Month to Month Lease.  An agreement by landlord and tenant to allow the tenant to occupy space on a month to month basis.  Typically this type of lease can be terminated by either party with a thirty day notice.

 

Monthly Rent.  One twelfth of the Annual Rent, paid to the landlord usually on the first of the month,

 

Mortgage.  Is a document which pledges the repayment of a loan for the purchase of a property, while the borrower of the money maintains possession of the property.

 

Multiplier.  The number by which another number is multiplied..  4 x 20 the multiplier is 4. 

 

Multi-Tenant Building.  A building that houses more than one tenant.

 

Multi-Tenant Floor.  A floor that houses more than one tenant.

 

 

 

N 

 

NAIOP.  National Association of Industrial and Office Properties

 

NAR.  National Association of Realtors

 

Natural Break Point.  The point or spot which makes the most sense to break to separate something.

 

Negotiating  To bring about through discussion a settlement of terms.

 

Neighborhood Shopping Center.  Centers that generally service several neighborhoods based or anchored by a shopping center with additional stores providing other goods and services.  These could be around 100,000 sq ft and up.

 

Net Absorption.  Indicates the amount of space or percentage of space after calculating Tenant movement from and into the property.  i.e  If a property is 100,000 square feet and in a given month  loses a 20,000 square foot tenant but leases 10,000 square feet in total of that vacant space then the building’s net absorption would be negative 10,000 square feet.

 

Net Lease.  A lease in which the rental payment is for the use of the space only.  Tenant will pay will pay for their own janitorial service or electric service, or lease indicates tenant will pay separately for both janitorial & utilities and/or proportionate share of the property’s real estate taxes..

 

Net Operating Income.  The amount of money left after deducting operating expenses, taxes and insurance from the building’s gross income.

 

Net Present Value (NPV).  The value of the lease once all costs of doing a transaction are deducted from the gross income of a lease.

 

Net Rentable Area.  Also referred to as Useable space.  Is the Building’s leaseable space after deducting all common areas.  See useable square feet.

 

Non Competitive Clause.  A clause in a lease restricting the landlord to leasing space to a like or competitive type of business.

 

Non-disturbance Clause.    Insures the tenant quiet enjoyment while occupying his office space.

 

Non-Recourse Loan.  Sometimes referred to as a collateral loan.  If the loan is defaulted on the only recourse the lender has is to foreclose on the item or property put up for collateral to insure repayment of the loan. 

 

Normal Use.  Tenant will use the premises for permitted purposes within the guidelines of the lease, during normal building operating hours.          

            Notices.  Any information sent from Landlord to Tenant.

NNN Lease/ Triple Net Lease.  A lease in which the Tenant pays the Landlord the rent but is also responsible to pay for their own utilities, janitorial or maintenance service and their proportionate share of real estate taxes.  See “Triple Net Lease”.

 

 

 

O

 

Obligation.  The act of binding oneself by social, legal or moral tie.

 

Office.  A place in which business, clerical or professional activities are conducted.

 

Office Building.  A structure containing offices where work is conducted.

 

Office Park.  An area in which a number of office buildings are constructed together, often on landscaped grounds with ancillary structures as those housing health care facilities and day care centers.

 

Office Showroom Space.  See Flex Space.

 

Office Supply.  The amount of office space in a given market or submarket.

 

Open Space Plan.  Is an office design which eliminates walls that would close off the space into individual offices.  Open Floor Plan.

 

Operating Cost Escalation.  Also referred to as CAM (Common Area Maintenance Increase).  It is addressed as an annual increase in operating expenses by the full service or modified gross lease and passed on to the tenant.  Sometimes dictated by a stated percentage increase in the lease, sometimes tied into the CPI (Consumer Price Index) or Cost of Living Increase.  It represents additional expenses incurred in running the property over the cost the year before.

In retail and industrial leases which are normally net or triple net these costs are addressed in terms of CAM or Common Area Maintenance charges, which are added onto the Base rent from the outset.   

 

Operating Expenses.  The landlord’s cost to operate the property.  Some items included are: Real Estate Taxes and assessments and other taxes, utilities, insurance, maintenance and repairs, common area refurbishing, janitorial, materials and supplies, repair service, cost of property management, security fees, employees and contractors, outside maintenance, cost of signs, rubbish removal, pest control, bulb replacement, etc.

 

Operating Expense Pass-thrus.  The amount that is passed on to the tenant in order to operate the building.  This would represent any amount over and above the amount agreed to in the lease, referred to as Base Year Expenses or the Expense Stops in a full service or modified gross lease.  This amount would be proportionate to the percentage of space occupied by the tenant in the building. This issue is addressed as CAM Common area maintenance charges in a retail or industrial space. 

 

Operating Expense Stop.  Is a method used by the Landlord for passing building operating expenses on to the Tenant (An additional charge).  It is a dollar amount established by the Landlord to indicate how much of the actual building operating expenses will be included or covered by your rental rate.  For instance, if you are quoted a lease rate of $14 per square foot with an expense stop of $4.00, your rental rate is actually $10 and the additional $4.00 of the quoted $14.00 per quare foot will cover the first $4.00 of your proportionate share of operating expenses.  Let’s say the above building’s actual operating expenses are $7.00, because your expense stop is $4.00 you will be expected to pay an additional $3.00 per square foot to make up the difference between your quoted expense stop and the building’s actual operating expenses.  In reality you are living with a $17.00 per square foot first year rate, (Including operating expenses). Remember the building’s operating expenses usually increase annually.

 

Option.  The exclusive right, usually obtained by a fee, to buy, sell or lease something within a specified time at a set price.

 

Out Parcel.  A piece of land usually on the outer perimeter of a development that  the owner wishes to sell for a special use, i.e. restaurants, banks, strip centers etc. 

 

Owner.  One who controls and possesses a property.

 

Owner’s Representative.  An individual charged with protecting the owner’s interest.

 

P 

 

Pad Site  A building lot available for retail development, as next to a shopping mall or center

 

Paid Parking.  A space in which to park your vehicle that you must pay for.  This could be paid for by putting money in a meter, paying an attendant for hourly parking or paying to park by the day, week, month etc.

 

Parking Lot.  Spaces in which to Park Vehicles

 

Parking Ratio.  The number of spaces a Tenant is allowed to have access to in conjunction with their lease.  i.e 4 spaces per 1,000 indicates 4 parking spaces for every ,1,000 square of space rented in the building.  This is usually determined on a leasable basis.

 

Partial Taking.  This usually occurs under “eminent domain,’ and refers to a partial taking of an owner’s property.

 

Pass-thrus .  Building and operating expenses that are to be paid by the tenant.

 

Percentage Lease.  Generally used for retail leases in which rent is based on a percentage of sales.

 

Performance Bond.  This is a bond posted by a construction company which insures the owner that the bonding company will complete the work if for some reason the contractor cannot.

 

Phantom Space.  Refers to space that rent is being paid on by a Tenant but there is no one occupying it. 

 

Physical Inspection.  When  someone is personally tours a property for the purpose of observing the property’s good and bad traits.

 

Physical Occupancy.  The day the Tenant moves into or takes possession of the space.

 

Planned Delivery Space.  Space that is currently under construction or renovation but has not yet been delivered to the Tenant.

 

Plat Map.  Maps that indicate the division of space usually into lots.

 

Plus Plus  Used in lieu of double net lease.  Which could be plus utilities, plus janitorial.  Plus Utilities and real estate taxes or any combination of two of the three.

 

Plus Plus Plus  Another term for a triple net lease. Meaning plus utilities, plus janitorial services plus real estate taxes.

 

Power of Sale.  A default clause found in a mortgage which gives the mortgagee or a trustee the power to sell the property in case of a default.

 

Pre-Cast Concrete.  Concrete or concrete products that have pre-fabricated at a plant and will put together on site.

 

Pre-Leasing.  The leasing of a project before construction of the project has been completed.

 

Prime Space.  First generation space.  Never been built out for a Tenant and never occupied.

 

Prime Tenant.  The major or key Tenant of the Building.

 

Principle, Interest, Taxes and Insurance ( PITI).  Indicates what’s included in a monthly mortgage payment.  

 

Procuring Cause. Some one who causes an affect or result.

 

Professional Office Building.  A building typically occupied by doctors, lawyers, accountants and other professional people.

 

Property Manager.  An individual who’s responsibility is to oversee the day to day operation of the property.  Could be directly employed by the property owner or work for a third party.

 

Property Management Agreement.  An agreement signed between the property’s owner and a third party such as a real estate broker or individual giving that person or brokerage the right to manage a property for a set percentage to be paid by the owner.

 

Proportionate.  Harmonious, symmetrical.

 

Proposal.  Is a letter sent by either buyer or seller, lessee or lessor to the other party, outlining the, proposed business aspects of the transaction.  If there is a signature line for acceptance of the proposal by the other party then the proposal becomes a “Letter of Intent.”  See Letter of Intent.

 

Pro-Rata Share.  Percentage of building occupied by the tenant, which is usually based on the rentable or leasable square footage measurement of your space compared to the rentable or leasable square footage of the building.

 

Pro-ration.  Is a division of cost proportionately, based on a given period of time.

 

Public Facilities.  Facilities or properties where the community or general public are given access.

 

Punch List.  A list of items yet to be completed or not done to the Tenant’s satisfaction prior to move-in .

   

 

Q 

 

Quid Pro Quo.  An equal exchange or substitution.

 

Quiet Enjoyment.   A right given to a tenant in most lease documents which gives the  tenant the assurance that they have the right to occupy their space undisturbed as long as they  abide by all the terms and conditions of the lease.

 

Quit-Claim Deed.  A deed that is intended to pass any claim that  seller has to the owner but does not warranty the Title.

 

Quoted Rate.  The rate per square foot that is quoted to prospective tenants when inquiring about the property.  May or may not be negotiable.  This may be quoted on a rentable or usable basis.

 

 

 

R

   

Radon Gas.  A colorless, radioactive, inert gaseous element formed by radioactive decay of radium.  Its used as a radiation source in radiotherapy and to produce neutrons for research.  This gas occurs naturally especially in areas over granite and is considered a hazard to health.

 

Raw Land.  Undeveloped unused land.

 

Real Estate Investment Trust (REIT).  A company that purchases and manages real estate or real estate loans, using money invested by its shareholders.

 

Real Property.  Land including all the natural resources  and permanent buildings on it..

 

Reassessment.  Is re-evaluating the value of a property.

 

Recapture.  The amount of money gained from a sale of real estate that would be taxed as regular ordinary income.  It is figured by taking the difference between the accelerated depreciation taken and the straight line appreciation allowed.

 

Rescission.  The act of a person involved in a contract to return to the identical state as before they entered into the agreement, due to courts not recognizing the agreement as being legally binding.

 

Recordation.  The act or process of recording.

 

Recourse.  The lender’s right to take the personal assets secured by the mortgage for non-payment.

 

Regional Shopping Centers.  Shopping Centers or malls that will service a large region the will usually be based by department stores and start around 500,000 sq ft.

 

Rehab.  A statement used to refer to a building that it undergoing improvements to attain an upgrade in appearance to make it more appealing in the market.

 

REIT.  See Real Estate Investment Trust.

 

Relocation Clause.  Any clause in a lease giving the landlord the right to move the tenant during the lease period.

  

Renewal.  The ability to renew a lease for a period of time.. 

 

Renewal Option.  An option in the lease giving the tenant the right to renew their lease, under certain terms and conditions and usually within a certain given time frame.

 

Rent.  Money or something of value paid from tenant to landlord for the right to occupy space in the landlord’s property.

 

Rent Abatement.  Free rent.

 

Rent Adjustment.   When rent is changed .  Tenant may have moved into space at a time that differs from rental commencement date there fore rent should be pro-rated or adjusted to give a credit.  An annual increase may have taken affect and has increased the amount of rent. 

 

Rental Houses.  Houses that a rented to tenants, a type of income producing property these are rented to generate income for the owner.

 

Rental Property.  Properties whose purpose are to be rented to a tenant or multiple tenants in order to generate income for the property’s owner.

 

Rent Commencement Date.  Per the lease document this is the day the tenant starts paying rent.

 

Rentable Square Footage.  The amount of square feet, including the common area factor of the building.  This typically is the square footage the tenant will pay rent on. 

 

Rentable/Usable Ratio.  When you divide the building’s rentable/leasable area by the building’s useable area  this should indicate the building’s Load/Common Area Factor. Or Rentable/Usable Ratio. 

 

Rental Concessions.  Examples of these  could be items such as free rent or rental abatement, additional construction dollars contributed by the Landlord to build-out the Tenant’s space, additional parking spaces.

 

Rental Rate.  The agreed upon rate that space is leased at.

 

Rent Roll.  A list of tenants occupying space in the building.

 

Rent Up Period.  The time it takes to lease the entire building.

 

Repair.  To restore to sound condition.  To set right, to remedy, to renew or revitalize

 

Research.  To study something thoroughly so as to present something in a detailed accurate manner.

Residential Real Estate.  The sale of housing.

 

Residential Real Estate Agent.  One who is licensed in a given state to sell or  lease real estate and has chosen to sell or lease housing.

 

Residential Real Estate Broker.  One who is licensed as a broker in a given state and can sell or oversee individuals or companies that sell or lease residential real estate.

 

Residential Real Estate Brokerage.  A brokerage by definition that specializes the in sale or leasing of residential properties. Sometimes deals with commercial sales or leasing and business brokerage as well.

 

Residential Salesman.  One who holds a real estate sales license in a given state and chooses to sell or lease residential real estate.

 

Restrictive Covenants.  Laws of restraint, or limitation of use.

            Revenue.  Money that is coming in on a regular basis.

            Revenue Sharing.  Distribution of incoming funds for use.

Right of First Refusal.  This is a right sometimes given in the lease to a tenant to lease additional/expansion space on a specified space in the building or in one of the Landlord’s properties.  For this to occur, another prospective tenant would be interested in the space that the tenant has the right of first refusal on, the landlord must first give the existing tenant the opportunity to lease that space under the same terms and conditions as the prospective tenant. If the existing tenant exercises their right then they must take the space immediately, if not the landlord is free to lease this space to the prospective tenant.

 

Roof Rights.  This occurs when the owner of a property would lease part of the roof of a structure for a particular use, i.e antennae, satellite dishes, helicopter pads.

 

RPA.  “ Real Property Administrator” A designation earned by a property manager by taking a set of required courses.

 

Running With The Land.  A statement usually used when referring to easements and covenants that would stay with a property if it were to be sold.

 

Rural.  Relating to characteristic of the country or people who live in the country.

 

 

   

S 

 

Sale-Leaseback.  In  this transaction the seller of the property will sell the property to a new owner then lease back the property for his or her use.

 

Salient.  An item that is prominent or conspicuous.  An item that sticks out or juts out.

 

Second Mortgage.  A mortgage taken out on a property that already has one mortgage, with priority in settlement of claims given to the earlier mortgage.

 

Secondary Market.  A market on which an investor purchases an asset from another investor rather than direct from the company.

 

Secondary Space.  Previously occupied space. 

 

Security Deposit.  An amount of money, usually placed in escrow, by tenant insuring landlord that all obligations of the lease will be met, and office space will not be damaged.

 

Securities and Exchange Commission (SEC).  A U.S. government agency that supervises the exchange of securities so as to protect investors against malpractice.

 

Setback. The distance from a certain reference point or lot line where you are not allowed to build.

 

Setback Ordinance.  Zoning or government ordinance which controls how far the setback will be determined for that community.

 

Short Sale A short sale in real estate occurs when the outstanding debt or loans against the property are greater than what the property can command if it were sold.

 

Single Floor Tenancy.  A floor occupied by a single tenant.

 

SIOR.  Society of Industrial and Office Realtors.

 

Site Analysis.  Also referred to as a “Specific Use Study.”  This is conducted to determine the highest and best use for a property.

 

Site Development.  Improvements that are done to a site before the actual construction of a building would begin.  Utility installation, grading etal.

 

Site Plan.  Also referred to as a “Master Plan”.  This is the detailed set of plans, that have been approved by the community’s zoning department that are being used to develop a property.

 

Slab.  The surface that is put over the supporting materials of a structure..

 

Small Strip Centers.  Smaller centers with a handful of smaller tenants, usual local tenants.  

 

Soft Dollars.  Money that is invested in a property and would be tax deductable in year one.

 

Soft Market.  Also referred to as a Tenant’s market.  This usually occurs when leasing activity is slow and/or occupancies are down.  In a market like this it is easier for tenants to get more concessions.

 

Space Plan.  A drawing representing the tenant’s build-out requirements within the desired office space.

 

Space Planner.  One who draws the space plan, usually done by an architect. 

 

Special Assessment.  Assessments levied against the property by the local government for common improvements such as sidewalks, street lights etc.  

 

Specialty Centers.  These are centers that can be of any size that specialize in selling either certain goods or possibly even discounted goods.

 

Specific Performance.  When one party sues another party to comply with a particular item in an agreement..

 

Specialist.  An expert who is devoted to one branch of business or one given area in a market..

 

Speculative Space/Spec Space.  This is office space that is built out prior to being leased to a particular tenant.  The space is considered speculative in nature.

 

Square Foot.  An measurement obtained by multiplying length times width.  i.e a true square foot would be 12” x 12” = 144 sq. inches. Or 1 square foot.

 

Standard Clause.  A clause in an agreement that is generally acceptable throughout a given market.  See Market Standard Clause.

 

Stepped Lease.  A lease that specifies the annual increases in rent or other pass- thrus that may occur at regular intervals 

 

Straight Lease.  Also referred to as a “Flat Lease”.  This is a lease agreement with no provisions for increases in rent for a set period of time.

 

Strong Market.  Also referred to as a Landlord’s market.  This occurs when buildings are relatively full with high occupancy percentages.  In a market like this Landlords give less concessions to successfully conclude leases. 

 

Structural Damage  Harm to a building that reduces value or usefulness

 

Structure  Something built or constructed. i.e a building, a bridge or a dam            

 

Sub-contractor.  Usually a specialty contractor that works under a general  Contractor, i.e.  electrician, plumber, dry-waller.          

            Sub-landlord.  One who grants a sub-lease 

Sublease.  Occurs when a tenant re-leases their space during the term of their tenancy.  It is generally a three party transaction.  Sub-leasee leases space from tenant and Landlord approves. 

 

Sub-market.  A section of a given market.  A piece of a market.

 

Sub-market Research.  A study of a portion or specific portion of the market.

 

Sub-market Study.  See sub-market research

 

Sublease Term.  The amount of time left on the lease of the Sub-lessor/Sub-landlord.

 

Sub-lessee.  Holder of a sub-lease

 

Sub-lessor.  One that grants a sub-lease

 

Subordination.  When the priority or position of one party is relinquished in favor of another party.  i.e  First mortgage holder relinquishing his position to the second mortgage holder.

 

Subrogation. The substitution of one person for another.  i.e substituting one creditor for another or one lender for another.

 

Succeeding Lease  A lease that follows or comes after the current one.

 

Subtenant.  Holder of a sub-lease.

 

Successor.  One who succeeds another.

 

Surety.  When one joins voluntarily with another in the owning of a debt or obligation. 

 

Surety Bond.  A bond given to protect the recipient against loss in case the terms of a contract are not filled.

            Surface Rights.  This is the right to use the surface of the land.

 

Surrender.  To relinquish possession or control of.

 

Surrender of Premises.  To relinquish control of the rental space.

 

Survey.  Measurement of a piece of land which usually includes its dimensions, boundaries and topographic features.

 

Synthetic Lease.  An operating lease that is structured so that it is not recorded as  a liability on the balance sheet instead it is considered to be an expense on the income statement.

 

 

T

 

 

Taking.  A term usually used with condemnation or eminent domain.

 

Tax Base.  The property’s tax valuation multiplied by the established tax rate to determine how much tax is due.

 

Tax Lien.   A lien that is placed on a property by the government for unpaid taxes.

 

Tax Roll.  A governmental list of  people or property owners that owe taxes.

 

Telephone Equipment Room.  A room where the telephone equipment and wires and stored

 

Tenant.  An individual or company that occupies space, under the terms and conditions of a lease document.

 

Tenant-at-Sufferance.  Is a tenant who has stayed beyond the termination of their lease.

 

Tenant-at-Will.  A tenant who holds occupancy for an unknown amount of time.  Usually has the landlord’s approval.

 

Tenant Improvements.  Usually refer to the improvements to be done to a space to make it ready for the new tenant’s occupancy.  It can also mean improvements being done by a tenant.

 

Tenant Improvement Allowance.  This is the amount of money the landlord is willing to contribute for the build-out of the tenant’s space.  It is usually quoted as x amount of dollars per rentable or usable square feet.

 

Tenant Eviction.  Landlord sues to remove tenant from the leased premises, usually due to non-payment or non-conformity to the rules and regulations of the property.

 

Tenant’s lease.  Any lease giving the tenant more rights than the landlord.

 

Tenant’s Market.  Normally a weak market.  Slow leasing activity and lots of space available throughout the entire market.

 

Tenant Representative.  Any Broker or representative exclusively representing the rights of a tenant during the course of a transaction

 

Tenant Roster.  A list of tenants in a given property sometimes includes expiration dates, contact points, size of suite amount paying for rent and more.

 

Tenant’s Services.  Those services provided to the tenant by the landlord, under the terms and conditions of the lease.

 

1031 Exchange.  A rule on deferred exchanges of like property.  Section 1.1031 of the Internal Revenue Code lays out in detail procedures for turning a sale or purchase transaction into an exchange.  The rules allow owners to sell their property and buy other like kinds of property without paying capital gains tax on the transaction.  The like kind provision is fairly general and includes the exchange of land, rental or business properties for each other.  The personal property aspect is much more restrictive. 

 

Term.  A limited period of time.

 

Termination.  The end of something.  The conclusion.

 

Time is of the Essence.  Statement in a lease which puts both parties on notice that they must perform regarding the lease document within a specified amount of time

 

Title.  A legal document stating that the holder is the legal and valid owner of the property.

 

Title Insurance.  Insurance that compensates for loss from title defects or encumbrances (such as liens) that were unknown but should have been discovered at the time the policy was issued.

 

Title Search.  An examination of public records to determine and confirm a property’s legal ownership and find out what claims are on the property.  A title search is usually performed by a title company or an attorney who researches the vested owner, the liens or other judgments on the property, the loans on the property and the property taxes due.

 

Total Inventory.  The entire square footage of the property.

 

Trade Fixtures.  Anything that is considered personal property in a business that is not directly attached to the surfaces of the space and therefore removable when the Tenant moves from the space.  

 

Traffic Study.  Is a term that is used for studies done to either determine the number of vehicles that by pass the property during a given time period.  Or it could be a study that determines how many people visit the property during a certain time period.

 

Triple Net Lease.  A lease in which the tenant pays all expenses, including their rent..  See NNN Lease.

 

Turn-Key Build-out.  Is a completed build-out of space, ready for the tenant to move into.

 

 

 

U

   

Under Construction.  A building that is under way but has not yet been completed or received a certificate of occupancy.  

 

Unencumbered.  Free of liens, or free and clear.

 

Unimproved Land.  Land that is in a raw state also referred to as “Raw Land.” See “Raw Land.”

 

Urban.  Of relating to the city.  Used when referring to city life.

 

Urban Renewal.  Rehabilitation of impoverished urban neighborhoods by large scale renovation or re-construction housing and public works.

 

Usable Square Footage.  The amount of square feet measured within the confines of the tenant’s space, no add ons.

 

Use.  Purpose of occupancy.

 

   

 

V

 

 

Vacancy Factor.  The amount of space not occupied in the building.

 

Vacancy Rate.  The vacancy of the building expressed as a percentage as opposed to square footage.

 

Vacant Space.  Space that is not currently occupied.

 

Valuation.  The act of assessing price, an appraisal.  An estimation of appreciation of worth, merit or character.

 

Vanilla Fudge.  An ice cream flavor or a popular rock band from the 1960’s

 

Vanilla Shell.  A Space that is wide open and very plain. No walls or upgraded finishes.

 

Vanilla Space.  Space that has no upgrades, usually built to building standard, with building standard paint, building standard carpet, building standard doors etc.

 

Variance.  A permit required by the local governmental agency to change the zoned use of a property.

 

Vendee.  Is a buyer of goods or properties.

 

Vendor.  Is a company or individual who sells items or property.

 

Vertical Penetration.  Areas such as stairwells, elevator shafts, flues, pipe shafts, vertical ducts which serves more than one tenant.  For measurement purposes, these items are not deducted if they serve a single tenant.

 

Viability.  Capable of living or developing under certain conditions..

 

Visibility.  Being often in the public view.  Conspicuous.  

 

 

 

W

 

 

Waiver.   Intentional relinquishment of a right, claim or privilege.  

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Warranty.  Certain assurances given from the seller to the buyer or building owner to the tenant.

 

Wear and Tear.   Deterioration of space due to occupancy.

 

Weighted Average Rental Rates.  The average rental rate of the vacant space in each building in the market or submarket.

 

Wet Column.  A column through which plumbing can be accessed for installation of sinks, drinking fountains, etc.

 

Wetland  an area that is saturated by surface water or groundwater at a frequency and duration sufficient to support and under normal circumstances does support a prevalence of vegetation typically adapted for life in saturated soil conditions.

 

Working Drawings.  The plans from which the contractor will build your space.  These are also the plans that have received governmental approval during the permitting process.

 

Work Letter.  This is usually an attachment to the Lease.  It indicates the materials that are considered building standard to be used in the build-out of space to be occupied by a Tenant within the building and the amount of dollars the Landlord is willing to contribute toward that build-out of Tenant’s space.    

 

Workout.  The process used to renegotiate a debt or a lease in order to avoid legal action.