Abatement A reduction or decrease. Usually referred to in terms of rent or other increases.
Above Building Standard Typically refers to items not included in the Building‚Äôs construction work letter. The work letter indicates what the ownership of the building will include in a standard office build-out for their building.
Absorbed Space The net change of the amount of office space in a given period of time.
Absorption Period The amount of time given to lease or sell a given amount of space.
Absorption Rate “The percentage of space in a market either taken off the market or added back into the pool of existing office space. Typically a gain in market absorption represents space that is now leased, that was not previously leased, or in a negative absorbed market space that was leased, that’s now vacant.”
Abstract The notes made by a title examiner based on his examination of the land records. These notes are a concise summary of the transactions affecting the property. The title agency produces a BINDER from the information in the abstract.
Acceleration Clause “A condition in a real estate financing instrument giving the lender the power to declare all sums owing lender immediately due and payable upon the happening of an event, such as the sale of the property, or a delinquency in the repayment of the note.”
Accretion The buildup of land from natural forces such as wind or water.
Acknowledgement “As a verb, the confirmation by a party executing a legal document that this is his signature and voluntary act. This confirmation is made to an authorized officer of the Court or notary public who signs a statement also called an acknowledgment.”
Acre “43,560 square feet of land.”
Ad Valorem (According to value) which refers to the value of property used in the computation of taxes.
Addendum “A document containing any additions or changes negotiated in the original lease. This document is always attached to the signed lease, as part of the lease. Items addressed in an addendum supersede the item being replaced in the lease.”
Add-On Factor “Also referred to as a loss factor, common area factor or core factor. The areas of a structure that are common to all tenants in the building, i.e. restrooms, corridors, storage rooms, electrical rooms, janitorial closets, lobbies etc.”
Adjustment Interval “On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years, depending on the index.”
Administrator “A person appointed by the Court to settle the estate of a person who dies without a will. The feminine form is Administratrix. Compare, EXECUTOR.”
Adverse Possession “A claim made against land titled to another person based on open, notorious and hostile possession and use of the land to the exclusion of the titled owner.”
After Hours Usage “Tenant‚Äôs 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.”
Agency A relationship in which the agent is given the authority to act on behalf of another person (Principal).
Agreement A meeting of minds. A change to the correct or alteration to the original document/agreement without changing its principal essence.
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.”
Amenities “Attractive features of a property such as a coffee shop, health facility, conference rooms, covered parking, etc.”
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 “Calculation to determine a regular-interval payment plan over time, with interest, to pay a set sum. As an example, to amortize $12 per square foot of tenant improvements at 10% interest, monthly payments over a 60-month period would be $.225/square foot.”
Amortized Loan “A loan to be repaid, interest and principal, by a series of regular payments that are equal or nearly equal, without any special balloon payment prior to maturity.”
Annual Bumps Slang for annual increases is such items as rent or operating expense increases.
Annual Operating Expense Increase/Overages “A charge passed on to the tenant representing the tenant‚Äôs 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)”
Annual Percentage Rate (APR) “Is an interest rate reflecting the cost of a mortgage as a yearly rate. This rate is likely to be higher than the stated note rate or advertised rate on the mortgage, because it takes into account point and other credit costs. The APR allows home buyers to compare different types of mortgages based on the annual cost for each loan.”
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.”
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.
Approved Attorney An attorney authorized by a title insurance company to handle closings and render title opinions.
Appurtenance Anything attached to the land or used with it passing to the new owner.
As-Is “The existing condition of real estate, prior to any improvements contemplated under a lease.”
Assessment The estimated value of property in order for a governmental fee to be imposed such as taxes or area improvements.
Assign To transfer interest.
Assignee One who receives an assignment or transfer of rights. An assignment of a contract transfers the right to buy property.
Assignment Of Lease Is the transfer of all responsibilities and liabilities of the lease from one party to another.
Assignment The transfer of leasehold interest in a property to a second party.
Assignor The one who assigns to another person.
Assumption “The agreement between buyer and seller where the buyer takes over the payments on an existing mortgage from the seller. Assuming a loan can usually save the buyer money since this is an existing mortgage debt, unlike a new mortgage where closing costs and new, possibly higher, market-rate interest charges will apply.”
Attachment Seizure of property through Court process to repay a debt.
Attorn To transfer to another or to agree to recognize a new owner of a property and to pay them rent.
Attorney In Fact A type of agency relationship where one person holds a POWER OF ATTORNEY allowing him to execute legal documents on behalf of another. Decisions made by the attorney in fact are binding on the principal.
Attornment 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.O.M.A. “Refers to The Building Owners and Manager‚Äôs 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 perminant 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‚Äôs 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 ammenities 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:”
BALLOON (Payment) Mortgage Usually a short-term fixed-rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.
Bankruptcy “A provision of Federal Law whereby a debtor surrenders his assets to the Bankruptcy Court and is relieved of the future obligation to repay his unsecured debts. A Trustee in Bankruptcy administers the assets, selling them to pay as much of the debt as possible. If your seller is in bankruptcy, the Trustee in Bankruptcy owns the property and is the party to sign the contract and make decisions. After bankruptcy, the debtor is discharged and his unsecured creditors may not pursue further collection efforts against him. Secured creditors, those holding deeds of trust or judgment liens, continue to be secured by the property but they may not take other action to collect from the debtor.”
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 Operating Expenses “The cost the owner is paying to cover the cost of operating the building in a given year. i.e. Base Year 1995 expenses would reflect the cost to operate the subject building in 1995. In subsequent years you would pay the diffrence in the amount it costs to operate the building, based on the percentage of the building you occupy.”
Base Year The year of a lease term which is used to compare subsequent years; usually used when calculating operating expense pass-through expenses.
Bay Depth Represents the distance from the building‚Äôs corridor wall to the outside window of the building.
Benchmark A permanent reference mark for surveyors.
Beneficiary “A person named to receive a benefit from a TRUST. A contingent beneficiary has conditions attached to his rights, usually someone else must die first.”
Bid An offer.
Binder A title insurance binder is the written commitment of a title insurance company to insure title to the property subject to the conditions and exclusions shown on the binder.
Blanket Mortgage “A mortgage covering at least two pieces of real estate as security for the same mortgage. This sort of loan is more common for commercial property or “”special case”" loans.”
Block Layout A preliminary method of roughly laying out a tenant’s internal office requirements. Gives an initial feel of the space prior to preparing a more detailed layout.
Boca “Building Officials Conference of America, which writes the guidelines for basic, community building codes.”
B.O.M.A. Standard “A nationally published standard of measuring office space. Standards are published by other organizations and can affect how the size of space is calculated. Are “”vertical”" penetrations such as elevator shafts and stairwells excluded? Are balconies included?”
Bond “An amount of money, often posted with the Court, to guarantee against loss as a result of a possible claim. For example, if there is a LIEN against the property, the owner may post a bond and the lien is removed from the property and the parties argue over the money rather than the property.”
Breach Of Contract Failure to perform provisions of a contract.
Broker “One who acts as an intermediary between landlord and prospective tenant. Broker could be acting on behalf of the tenant (<a href=?search=Tenant%20Representative>Tenant Representative</a>), or the landlord (Building Representative). ”
Build To Suit Is the build-out of space according to the tenant‚Äôs established guidelines.
Building Amenities “Features of the building that add to the comfort of the tenant while in occupancy. i.e., coffeeshop, health facility, covered parking, break rooms, conference rooms, Fed Ex Machines, UPS Machine, etc.”
Building Codes “A set of laws enacted by the local governmental authorities, to regulate the operation of office buildings within their jurisdiction.”
Building Core “The section of the building where the restrooms, ventilation shafts, electrical distribution, elevator shafts, and stairwells are located.”
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 Operating Hours “The normal hours of operation for the building, as set forth in the lease.”
Building Restriction Line “A required set-back a certain distance from the road within which no building may take place. This restriction may appear in the original plat of subdivision, restrictive covenants or by building codes and zoning ordinances.”
Building Shell “This can mean different things to different people, but usually refers to a partially completed building with roof, walls, foundation, and may or may not include restroom cores, HVAC. Usually does not include any tenant improvements such as floor or wall coverings, drop t-bar ceilings, interior walls, or partitioning.”
Building Standard “Refers to the items covered in the building‚Äôs construction work letter, defining the items necessary to create a standard office space.”
Build-Out “Refers to the construction of the tenant‚Äôs proposed space, to make it ready for occupancy, or to comply with tenant‚Äôs construction needs according to the terms and conditions of the lease. Also referred to as T.I. (Tenant Improvements)”
Build-To-Suit A customized design and build approach to a tenant’s space usually resulting in a single occupant building which is then leased or sold to the tenant.
Buy Out The ability to pay money or something of value in order to be released from the obligations of a lease.
Buy-Down “When the lender and/or the home builder subsidized the mortgage by lowering the interest rate during the first few years of the loan. While the payments are initially low, they will increase when the subsidy expires. These are sometimes used to qualify borrowers for a loan amount that they would not otherwise qualify for but will be able to pay in subsequent years as their income increases.”
By-Laws Rules and regulations governing an association or corporation.
CPI (Consumer Price Index) “In most leases this is used as the basis for adjusting annual rent increases. It is also referred to as a “”Cost of Living”" increase. This is the federal government index that measures the change in cost of a variety of goods. It is used as an indicator to reflect future pricing as an adjustment for inflation.”
Capital Gains Profit earned from a sale of real estate.
Capitalization A method used to estimate value of a property based on the rate of return on investment.
Cash Flow “The amount of money the Landlord will receive from the lease, after the deduction of operating expenses, taxes and insurance.”
Category 5 Wiring specification ‚Äì usually for computer networks (CAT 5).
Caveat Emptor Buyer beware. The buyer must inspect the property and satisfy himself that it is adequate for his needs. The seller is under no obligation to disclose defects but may not actively conceal a known defect or lie if asked.
CC&Rs “Covenants, conditions, and restrictions. The basic rules establishing the rights and obligations of owners of real property within a subdivision or other tract of land in relation to other owners within the same subdivision or tract and in relation to an association of owners organized for the purpose of operating and maintaining property commonly owned by the individual owners.”
CCIM “Certified Commercial Investment Member. An international professional designation requiring over 200 hours of specialized education; awarded to less than 3,000 in the World (as of 6/96). Investment sales, commercial leasing, development, corporate strategic planning, etc.”
Ceiling Plenum The totally enclosed area above the ceiling used for the distribution of the air conditioning system (as opposed to fully-ducting the supply and return air system).
Certificate Of Eligibility “The document given to qualified veterans which entitles them to VA guaranteed loans for homes, business, and mobile homes. Certificates of eligibility may be obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility).”
Certificate Of Occupancy “A document issued by the local governmental authorities, stating that the building of office space is in the proper condition to be occupied.”
Certificate Of Satisfaction “A document signed by the Note holder and recorded in the land records evidencing release of a DEED OF TRUST, MORTGAGE or other lien on the property.”
Certificate Of Title “A written opinion by an attorney setting forth the status of title to the property as shown on the public records. The certificate does not certify as to matters not of record and affords no protection unless the author was negligent. Compare, TITLE INSURANCE.”
Chain Of Title The series of transactions from GRANTOR to GRANTEE as evidenced in the land records.
Change Order A document usually signed by the tenant when making a revision to the original buildout plans. It represents the tenant‚Äôs authorization to revise and usually indicate the tenant‚Äôs willingness to pay for the revision.
Chattel Personal property.
Class A Building “A term commonly used when referring to the highest quality buildings. Building classification may rate how the building is generally accepted in the market, or could be a personal classification by the individual referring to that structure.”
Class Action A claim brought up on behalf of a group of people.
Class B Building “A term commonly used to describe an average building. Building classification may rate how the building is generally accepted in the market, or could be a personal classification by the individual referring to that structure. Class C Building. A term commonly used to describe a below average building. Building classification may rate how the building is generally accepted in the market, or could be a personal classification by the individual referring to that structure.”
Client Club Major firm with vendor/outsource services sets up multi-purpose mixed work surface area for non-employees. Used in office hoteling.
Closing “The meeting between the buyer, seller and lender or their agents where the property and funds legally change hands. Also called settlement. Closing costs usually include an origination fee, discount points, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report and notary fees.”
Cloud On Title An evidence of encumbrances.
Cockpit Office “Small office (i.e. 50 square feet), full-height walls, set up for privacy with workspace for computer and telephone, sidelight, task workstation, overhead shelves.”
Coinsurance When more than one insurance company shares the risk of a particular transaction or series of transactions. Lenders may require co-insurance on large commercial projects.
Collateral Property pledged to secure a loan.
Commencement Date Date the lease takes affect. Usually from the landlord‚Äôs perspective the day the tenant starts paying rent on the occupied space.
Commercial Property “Other than residential. Owned or leased property such as office, research, retail and industrial properties.”
Commission “A fee generally paid to a Real Estate Broker, or other properly licensed individual for acting as the procurring cause of the transaction.”
Common Area Factor “Any space in a building affording common use for all tenants, with the exception of vertical penetrations. Translation – Lobbies, corridors, restrooms, building breakrooms, building conference room, health facility, janitorial closets and storage rooms. It does not include the stairwells or the elevator shafts, flues or vertical ducting.”
Common Area Maintenance (CAM) “An additional, annual charge often assessed to tenants for maintenance of the property’s “”common area”", such as its entryways, hallways or bathrooms.”
Common Area Maintenance Fees (Cam Recovery) In retail it‚Äôs a fee charged to tenants to maintain the outward and overall appearance of the property. In the office building industry it‚Äôs generally interchangable with overage of operating expenses.
Comparables Properties similar to a particular property used as a comparison to determine a fair market value.
Concession Is an item given up during negotiations. Coming from the landlord it could be in the form of free rent or other reduction. From a tenant it would be backing off a demand.
Condemnation “The process in which the government is able to take property from an owner, without the owner‚Äôs consent. Also referred to as eminent domain. Owner is compensated for the property.”
Condominium “A system of individual FEE SIMPLE ownership of portions (units) in a multi-unit structure, combined with joint ownership of common areas. Each individual may sell or encumber his own unit. Compare, COOPERATIVE.”
Conservator “Also called a Committee or Guardian, a person designated by the Court to protect and preserve the property of someone who is not able to manage their own affairs. Examples include the mentally incompetent, minors and incarcerated persons.”
Construction Loan A short-term interim loan to pay for the construction of buildings or homes. These are usually designed to provide periodic disbursements to the builder as he progresses. These are generally done by lenders with offices local to the site of the construction. This enables the lender or their agent to monitor the progress of the construction.
Construction Management Construction supervision by a qualified manager.
Contiguous Space “Refers to the space next door, or adjoining the tenant‚Äôs occupied space.”
Contract A legally enforceable agreement between two parties.
Contract Documents “The complete set of drawings, specifications, bidding instructions, construction agreement, etc. used in the construction industry. The AIA (American Institute of Architects) standard forms are routinely used, but are not mandatory.”
Contract For Deed Also known as a Land Contract or Land Installment Contract. A method of financing where title remains in the Seller’s name until the Buyer has paid the full purchase price. A Contract for Deed will normally trigger the DUE ON SALE CLAUSE in a DEED OF TRUST or MORTGAGE but Veterans Administration regulations specifically allow Contracts for Deed without invoking the DUE ON SALE CLAUSE.
Contract Rent The actual rent paid under the terms of the lease.
Conventional Loan A mortgage not insured by FHA or guaranteed by the VA.
Conveyance Is the transfer of title or ownership from one party to another.
Cooperative “A system of individual ownership of stock in a corporation that. in turn, owns the structure. Each owner has an exclusive right to use his individual unit and must pay his portion of the debt encumbering the entire building. Compare, CONDOMINIUM.”
Coring Drilling or removing a section of the flooring to provide access to the electrical distribution system.
Cost Approach A method used by an appraiser to estimate replacement costs of improvements less depreciation.
Co-tenancy “Ownership in the same land by more than one person. See, TENANTS IN COMMON, JOINT TENANTS, TENANTS BY THE ENTIRETY.”
Covenant “A written agreement or restriction on the use of land or promising certain acts. Homeowner Associations often enforce restrictive covenants governing architectural controls and maintenance responsibilities. However, land could be subject to restrictive covenants even if there is no homeowner’s association.”
CPM Certified Property Manager. Professional designation conferred by Institute of Real Estate Management; requires extensive specialized education and experience.
Credit Report A report documenting the credit history and current status of a borrower’s credit standing.
Date Of Lease Is the date the lease has been executed by both the tenant and the landlord.
DBA “The abbreviation for “”doing business as”".”
Deal The state of agreement both parties are looking for.
Debt Service Payments made on a loan.
Debt-To-Income Ratio “The ratio, expressed as a percentage, which results when a borrower’s monthly payment obligation on long-term debts is divided by his or her gross monthly income. See housing expenses-to-income ratio.”
Deed “The written document conveying real property. The Deed must be executed (signed), ACKNOWLEDGED, and DELIVERED to the Grantee. Once recorded at the Courthouse, the original piece of paper is not needed to convey title in the future.”
Deed Of Trust “A voluntary lien to secure a debt deeding the property to Trustees who foreclose, sell the property at public auction, in the event of default on the Note the Deed of Trust secures. Compare, MORTGAGE.”
Default “The failure to meet an obligation, including lease clauses (i.e. timely rent payment, tenant use of premises, etc.) and mortgages (i.e. timely mortgage payment, timely payoff upon due date).”
Deferred Interest “When a mortgage is written with a monthly payment that is less than required to satisfy the note rate, the unpaid interest is deferred by adding it to the loan balance. See negative amortization”
Deficiency Judgment “If the foreclosure sale does not bring sufficient proceeds to pay the costs of sale and the note in full, the holder of the note may obtain a judgment against the maker for the difference.”
Delivery “The final, unconditional and absolute transfer of a DEED to the Grantee so that the Grantor may not revoke it. A Deed, signed but held by the Grantor, does not pass title.”
Demising Wall “A common wall that separates two tenants, or tenant from building common areas. (Usually to the underside of the floor above.)”
Depreciation A decrease in property value.
Dominant Portion A feature that makes up more than 50% of the inside surface of a permanent wall.
Dower A spouse’s interest in the property of a deceased spouse.
Down Payment Money paid to make up the difference between the purchase price and the mortgage amount.
Dual Agency Representation of opposing parties (buyer and seller) at the same time in the same transaction. This situation most often refers to cases where the Realtor is the agent for both parties.
Due On Sale Clause A clause in the MORTGAGE that makes the loan non-assumable by providing the noteholder may call the loan immediately due and payable upon a sale or conveyance of an interest in the property. The FNMA/FHLMC form provides that a lease of more than three years or a lease with an option to buy also triggers this provision.
Earnest Money A good faith deposit.
Easement “The right to use the land of another for a specific limited purpose. Examples include utility lines, driveways, and INGRESS AND EGRESS. Easements can be temporary or permanent.”
Economic Rent An analysis used to determine the property‚Äôs market rent.
Effective Rate “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‚Äôs common area factor, sometimes used to describe how well the building is being run as reflected in lower operating expenses..”
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 The power of the state to take private property for public use upon payment of just compensation.
Eminent Domain “A method used by the government to acquire property, by condemnation without having to get the owner‚Äôs consent. The owner is compensated for the property.”
EMS “Energy Management System. Computerized system to minimize the cost of operation while maintaining specified temperature and comfort parameters. May include integration of HVAC, electrical, and lighting systems.”
Encroachment The physical intrusion of a structure or improvement on the land of another. Examples include a fence or driveway over the property line.
Encumbrance A claim or lien filed against a property.
Equal Credit Opportunity Act (Ecoa) “Is a federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs.”
Equity “The difference between the fair market value and current indebtedness, also referred to as the owner’s interest. The value an owner has in real estate over and above the obligation against the property.”
Equity Participation The participation by the lender in an active ownership position with the property.
Equity Sharing “A form of joint ownership between an owner/occupant and an owner/investor. The investor takes depreciation deductions for his share of the ownership. The occupant receives a portion of the tax write-offs for interest and taxes and a part of his monthly payment is treated as rent. The co-owners divide the profit upon sale of the property. Compare, JOINT OWNERSHIP AGREEMENT.”
Equity “Usually refers to one‚Äôs ownership position in a property, reflecting the market value of 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.
Escalation “The mechanism in a lease, which increases the rent, usually annually. May be set forth in fixed steps, tied to increases in operating expense, or to increases in the Consumer Price Index (CPI).”
Escheat Property that reverts to the state when an individual dies without heirs and without a will.
Escrow A disinterested third party holds funds or documents on behalf of others and subject to their instructions.
Escrow Agreement Governs the terms under which money may be placed into an escrow account and how it is to be handled or distributed.
Estoppel Certificate “A statement concerning the status of an agreement, (usually a lease) and the performance of obligations under the agreement. A third party such as a lender, relies on the statement (which is usually unilaterally executed by the tenant) for such things as making a loan on property.”
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.”
Executor “A person named in a will to carry out its terms and administer the estate. The feminine form is Executrix. Compare, ADMINISTRATOR.”
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.
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.
Face Rent The asking rent.
Face Time Time spent face-to-face with clients. One benefit to virtual office programs.
Fair Market Value (FMV) “The price which the market would bring, over a reasonable period of time, for a property for sale or for lease.”
Fair Market Value This is the price that the property would most likely bring in today‚Äôs market.
Federal Home Loan Mortgage Corporation A affiliate of the Federal Home Loan Bank which creates a secondary money market in conventional residential loans and in FHA and VA loans by purchasing mortgage loans from members of the Federal Reserve System and the Federal Home Loan Bank Systems.
Fee Simple “The absolute total interest in real property. Compare, LIFE ESTATE, REVERSION.”
Fiduciary Relationship A relationship of trust and confidence between principal and agent; lawyer and client; doctor and patient; etc.
Fiduciary Loyalty to a certain party.
Finished Surface “A wall, a ceiling or a floor, including glass that‚Äôs been placed in the space for the Tenant‚Äôs use.”
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.
Fixture An item of personal property attached to real property so that it can not be removed without damage to the real property. A FIXTURE becomes part of the real property.
Flex Space Sometimes referred to as office/showroom space. It consists of some office but mostly warehouse space.
Flex Space “A building providing use flexibility between office, and other uses such as manufacturing, laboratory, warehouse, etc. Usually provides high bays and relocation flexibility for overhead doors and other entrances.”
Floor Load Capacity “The amount of weight a floor in a building is safely capable of sustaining, per square inch.”
Force Majeure “(An uncontrollable force) an event outside the reasonable control of the parties to a contract such as an “”Act of God”", war, riots or strikes which would prevents the parties from complying with the provisions of an agreement.”
Foreclosure “The process by which a lender sells property securing a loan in order to repay the loan. Under a DEED OF TRUST, foreclosure is by public auction after appropriate advertisement. A MORTGAGE may require the lender to obtain Court approval prior to sale.”
Free Office “Walk in, find an unoccupied office to suit your needs. Used in conjunction with office hoteling.”
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 extreme soft periods in leasing when the market is known as a “”tenant‚Äôs 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 Indexed Note Rate “As related to adjustable rate mortgages, the index value at the time of application plus the gross margin stated in the note.”
Fully Serviced Lease “Type of lease whereby landlord pays as part of the base rental rate utilities, sewer, water, garbage, landscaping, property taxes, and insurance, janitorial, and maintenance.”
Functional Design A plan affording a user maximum efficiency from their space.
General Contractor “The individual or company that coordinates all construction work, oversees the construction and hires and is responsible to pay all sub-contractors.”
General Warranty Deed The Grantor warrants title against all claims.
Go-Dark “The condition that results from a tenant’s closing its business, even though the lease is still in effect. Lease language may provide a means for a landlord to void a lease and take back the leased premises if the tenant ceases to operate its business at that location.”
Graduated Lease A lease with varied rental payments sometimes referred to as a stepped lease.
Graduated Payment Mortgage (GPM) A type of flexible-payment mortgage where the payments increase for a specified period of time and then level off.
Grantee “The person receiving an interest in property. Compare, GRANTOR”
Grantor “The person granting, selling or giving up an interest in property. Compare, GRANTEE.”
Gross Income Income before expenses.
Gross Income Income before expenses.
Gross Lease “The type of lease that as all inclusive. The tenant pays rent, the owner pays all expenses related to the property.”
Gross Lease “Commonly specifies one rental amount inclusive of rent, taxes, utilities, maintenance, etc. associated with the rental of a property.”
Gross Margin “With regard to an adjustable rate mortgage, an amount expressed as percentage points, stated in the note which is added to the current index value on the rate adjustment date to establish a new note rate.”
Gross Square Feet “Usually refers to gross area of a building by measuring from the outside of its exterior walls and including all vertical penetrations, such as elevator shafts. Also includes basement space.”
Gross Square Foot “Usually the total building square footage, including elevator shafts, vertical penetrations, equipment areas, ductwork shafts, and stairwells.”
Gross Square Footage “Total square footage of the building, or property.”
Ground Lease “The owner grants a long-term lease of the land (usually 99 years) and allows the lessee to build and use the land as agreed. At the end of the term, the land and all improvements revert to the owner.”
Ground Lease “A long-term lease of land, entered into by a tenant to construct a building (at its expense) from which to conduct its business.”
Guarantee “If a business is relatively new (under five years), their financial statement is not real strong, or the landlord has some discomfort with the prospective tenant‚Äôs ability to last through the lease, he might ask for a personal or corporate guarantee. It is assurance that if the tenant defaults, the person or entity guaranteeing the lease will pay rent and continue to live up to all the terms and conditions of the lease.”
Guardian “One appointed by the Court to administer the affairs of a minor. A guardian ad litem is appointed to protect one’s interest in a particular legal action. See, CONSERVATOR.”
Hazard Insurance “A form of insurance in which the insurance company protects the insured from specified losses, such as fire, windstorm and the like.”
Hiatus A gap or space left between two parcels of land and not included in the legal description of either parcel. Similar terms are Gaps and Gores.
Hold Over The condition that results when a tenancy exists beyond the end of the term of a lease.
Holding Over This is caused when a tenant remains in their space beyond the agreed upon term of the lease.
Homestead Deed A declaration filed in the land records that an individual is asserting his homestead exemption. That exemption allows one to protect some assets (amount varies by state) against the claims of creditors.
Hot Desk “Data, electrical, and phone connected, ready to plug in.”
Housing Ratio “The ratio, expressed as a percentage, which results when a borrower’s housing expenses are divided by his/her gross monthly income. See debt-to-income ratio.”
HVAC “Heating, Ventilating, and Air Conditioning.”
IDRC “International Development Research Council. Founded in 1961, International Association of Real Estate Executives promotes effective asset real estate management, supports research, and offers numerous educational opportunities.”
Impound “That portion of a borrower’s monthly payments held by the lender or servicer to pay for taxes, hazard insurance, mortgage insurance, lease payments, and other items as they become due. Also known as reserves.”
Improvements Construction being done within the tenant‚Äôs space or within the building itself.
Income Approach A method used by an appraiser to estimate the value of a property by calculating its generated income.
Indemnity A protection against actual loss or damage as a result of the matter mentioned. An indemnity is not an absolute guarantee that something won’t happen; it states the terms under which an actual loss will be compensated.
Index “A published interest rate against which lenders measure the difference between the current interest rate on an adjustable rate mortgage and that earned by other investments (such as one-, three-, and five-year U.S. Treasury security yields, the monthly average interest rate on loans closed by savings and loan institutions, and the monthly average costs-of-funds incurred by savings and loans), which is then used to adjust the interest rate on an adjustable mortgage up or down.”
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.”
Ingress And Egress “Applied to EASEMENTS, meaning the right to go in and out over a piece of property but not the right to park on it.”
Initial Note Rate “With regard to an adjustable rate mortgage, the note rate upon origination. This rate may differ from and is usually less than the fully indexed rate.”
Insurable Title “Title subject to a defect or claim which a title insurance company is willing to insure against. Compare, MARKETABLE TITLE.”
Insured Closing Letter “An indemnity given to a lender from a title insurance company, agreeing to be responsible if the closing agent does not follow the lender’s instructions or misappropriates the loan proceeds. Lenders usually require an insured closing letter be on file for each settlement.”
Interim Financing A construction loan made during completion of a building or a project. A permanent loan usually replaces this loan after completion.
Intestate “An estate without a Will. Compare, TESTATE”
Inventory Is a term used reflecting the amount of space available within a given market.
IREM “Institute of Real Estate Management. Asset and property managers, extensive education programs, conferences, and networking.”
ISDN “Integrated Services Digital Network. A high-speed data and media communication system, as much as ten or more times faster than conventional phone lines.”
Janitorial “This expense is generally covered under a full service lease, and paid for under the terms of a net or triple net lease arrangement. Normal janitorial functions typically included a light dusting, emptying of trash and ashtrays and light cleaning or vacuuming of floors.”
Joint Ownership Agreement “An agreement between owners defining their rights, ownership, monetary obligations and responsibilities. This could be between and investor and an occupant or the occupants. If an investor is involved, the investor does not take depreciation deductions and none of the occupant’s payment is deemed rent for tax purposes. Compare, EQUITY SHARING.”
Joint Tenants “Two or more persons own a property. Joint tenants with the common law right of survivorship means the survivor inherits the property without reference to the decedent’s will. Creditors may sue to have the property divided to settle claims against one of the owners. Compare, TENANTS IN COMMON, TENANTS BY THE ENTIRETY.”
Judgment Lien A judgment is a lien against all real property owned by the judgment debtor in the county where the judgment is docketed (recorded).
Jumbo Loan “A loan which is larger (more than $207,000 as of 1/1/96) than the limits set by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. Because jumbo loans cannot be funded by these two agencies, they usually carry a higher interest rate.”
Junior Mortgage Mortgage of lesser priority than the prior recorded mortgage.
Land Contract “See, CONTRACT FOR DEED.”
Landlord “The person who controls, operates,or owns the property.”
Landlord‚Äôs Lease A lease written that is weighed to the advantage of the Landlord.
Landlord‚Äôs Market “An office market showing strong signs of being favorable to the landlord. Typically a market that‚Äôs experiencing strong leasing activity, and doesn‚Äôt have a lot of available space.”
Landlord‚Äôs Warrant This gives the landlord the right to lien a tenant‚Äôs personal property and the right to sell it to collect delinquent rent.
Leasable Square Footage The amount of space in the building or within the Tenant‚Äôs 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‚Äôs load factor equals the leasable square footage.
Lease Commencement Date The date that the lease begins.
Lease Commencement Date “The date upon which the lease commences and the obligations of the parties begins (see also “”rent commencement date”").”
Lease Expiration “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 Hold Estate Tenant’s right of possession for a specific period of time under a lease agreement. (Common in Hawaii.)
Lease Proposal “A presentation, usually written of the proposed lease terms and conditions for the prospective tenant‚Äôs occupancy.”
Lease Term “Number of months, or years the agreed upon lease will remain in force.”
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.
Leasee The individual or company leasing space from another party.
Leasehold Improvements “Construction or improvements for the purpose of preparing the premises for the conduct of tenant’s business. Improvements permanently attach to the premises unless they are trade fixtures, and they remain with the premises after the end of term of the lease.”
Leasing Agent “The individual assigned the responsibility, usually by the building owner to lease up the property.”
Lessor The individual or building owner leasing space to another party.
Letter Of Attornment “see “”attorn”".”
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 A claim or charge against property. Property is said to be encumbered by a lien and the lien must be removed to clear title.
Lien Waiver A waiver of mechanic’s lien rights signed by a general contractor and his subcontractors.
Lien An encumbrance against personal items such as property for money.
Life Cap “With regard to an adjustable rate mortgage, a ceiling the note rate cannot exceed over the life of the loan.”
Life Estate “The right to use, occupy and own for the life of an individual. Compare, FEE SIMPLE.”
Lis Pendens Recorded document showing a pending litigation filed in the court. These show up on the preliminary title report and must be dealt with when transferring ownership or refinancing.
Listing Agreement An agreement between a property owner and a broker giving the broker the right to sell or lease the owner‚Äôs property in return for compensation.
Live Load “The variable weight per square foot to which a building is subjected. Typical suburban live-loads may be in the 50-70 lbs. per square foot range, while class A high-rises may offer 75-120 lbs. per square foot. This measurement may be critical for heavy file or equipment areas.”
Load Factor Or Loss Factor Also referred to as common area factor. It‚Äôs the difference between the rentable and usable square footage in the building.
Load Factor “The common area calculation used to convert usable square foot measurements (usually, the physical space actually occupied by the tenant) to rentable square foot calculations. Usually includes a prorata share of restrooms, lobby, and common hallways.”
Load Factor “The amount of square footage is a lease, in addition to a tenant’s usable square footage, which represents tenant’s pro rata share of the building’s common area/s. May also be referred to as a percentage of building’s rentable square feet.”
Loan Application “The loan application is the source of information on which the lender bases a decision to make the loan; defines the term of the loan, gives the name(s) of the borrower(s), place of employment, salary, bank accounts and credit references, and describes the real estate that is to be mortgaged. It also stipulates the amount of the loan being applied for and the repayment terms.”
Loan-To-Value Ratio (LTV) The relationship between the amount of the mortgage loan and the appraised value of the property expressed as a percentage.
Maintenance The care and upkeep of the property.
Majority The age at which a person may handle his own affairs.
Management The responsibility for over-seeing the day to day operation of the office building.
Margin The amount a lender adds to the index on an adjustable rate mortgage to establish the adjusted interest rate.
Market Analysis A study reflecting various conditions of a given market.
Market Indicators Statistical data pinpointing particular reasons for affect on a 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 Survey A study of vital statistics from various properties effecting a segment of or the market.
Market Value The highest price that a buyer would pay and the lowest price a seller would accept on a property. Market value may be different from the price a property could actually be sold for at a given time.
Marketable Title “Title without defects or claims so as to be readily accepted without fair or reasonable doubt. Compare, INSURABLE TITLE.”
Mechanic’s Liens “The right of an unpaid contractor, laborer or supplier to file a lien against property to recover the value of his work”
Metes And Bounds A means of describing land by directions and distances rather than reference to a lot number. Generally used when land has not been subdivided into lots.
Mixed Use Building Also referred to as a multi-tenant building. Tenancy is made up of more than one tenant in various businesses.
MOBE Mobile Office Business Environment.
Modified Gross Lease “This is 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.”
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.”
Month-To-Month “A lease for a specific period of time, usually one month, which automatically renews itself for the same period of time, unless landlord or tenant provide notice to terminate.”
Mortgage “A voluntary lien filed against property to secure a debt, usually a loan. To foreclose, the lender must often institute a court action and the borrower may have the right to reclaim the property after foreclosure. Compare, DEED OF TRUST.”
Mortgage Insurance “Money paid to insure the mortgage when the down payment is less than 20 percent. See private mortgage insurance, FHA mortgage insurance.”
Mortgagee The lender
Mortgagor The borrower or homeowner.
Moteling “Check in on arrival, assigned to office. A variation of the office hoteling theme.”
Multi-Tenant Building A building that houses more than one tenant.
Multi-Tenant Floor A floor that houses more than one tenant.
INACORE International Association of Corporate Real Estate Executives. One of the most progressive corporate real estate training and education programs in the world.
NAIOP National Association of Industrial and Office Parks.
Negative Amortization Occurs when your monthly payments are not large enough to pay all the interest due on the loan. This unpaid interest is added to the unpaid balance of the loan. The danger of negative amortization is that the home buyer ends up owing more than the original amount of the loan.
Net Effective Income The borrower’s gross income minus federal income tax.
Net Lease “Type of lease whereby the Tenant pays for part or all of the operating expenses which may include utilities, janitorial, property insurance, property management, sewer, water, and garbage. Sometimes referred to as triple net or absolute net lease.”
Net Net Net (Nnn) Lease Type of lease where Tenant generally pays for all operating expenses. May even include responsibility for roof and structural repair or replacement.
Net Operating Income “The amount of money left after deducting operating expenses, taxes and insurance from the building‚Äôs 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 usable. It is the measurement of a space, a floor or a building less all vertical penetrations.”
Net Worth The difference between total assets and total liabilities.
NNN See triple-net below.
Non Competitive Clause A clause in a lease restricting the landlord to leasing space to a like or competitive type of business.
Non-Assumption Clause “A statement in a mortgage contract forbidding the assumption of the mortgage without the prior approval of the lender. Note: The signed obligation to pay a debt, as a mortgage note.”
Nondisturbance Clause Insures the tenant quiet enjoyment while occupying his office space.
Normal Use “Tenant will use the premises for permitted purposes within the guidelines of the lease, during normal building operating hours.”
Notary Public One authorized by law to acknowledge and certify documents and signatures.
Note “A written promise to pay a certain sum of money at a certain time. A negotiable note starts “”Pay to the order of”" and is transferable by endorsement similar to a check.”
Notice Of Commencement Legal notice to the county’s register of deeds that remodeling/improvements will be undertaken at an address.
Notice Of Furnishing “Legal notice by a subcontractor or supplier that it furnished labor or materials, subsequent to the notice of commencement, thereby establishing the legal right to be paid for the services rendered.”
Offer A proposal; after acceptance it becomes a contract.
Office Hoteling Office space plan to house more people in less space by eliminating permanent offices for many employees. Allows organizations to reduce space costs by relying on technology to create the appearance of a permanent office.
Open Space Plan Is an office design which eliminates walls closing off the space into individual offices.
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 Stop. This amount would be proportionate to the percentage of space occupied by the tenant in the building.”
Operating Expenses “The landlord‚Äôs cost to operate the property. Some items included are: Real Estate Taxes and assesments and other taxes, utilities, insurance, maintenance and repairs, common area refurbishing, janitorial, matierials 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.”
Option (1) A right given for a consideration to keep an offer to purchase or lease open for specific time.
Option (2) “A term in a lease for the rights either tenant or landlord may have with respect to one another, usually with stipulations regarding timing of those rights.”
Partition “The forced division of land among parties who were formerly co-owners. A partition suit may ask to divide the land, or if that is not practical, sell the land and divide the proceeds.”
Partition Wall “A wall constructed to create work areas such as offices or conference rooms. Depending on security needs, a partition wall may not be constructed to the roof or floor decking, but may terminate at lower point such as a suspended ceiling.”
Party Wall Usually located in a fraternity house.
Pass Throughs Building and operating expenses that are to be paid by the tenant.
Pass-Through Expense “An expense associated with tenancy in which landlord “”passes through”" to tenant certain increases in building operating expenses occurring after a base year in the lease.”
Pay-Off Amount A total balance; amount of a full payment on existing loan or lien.
Percentage Lease Generally used for retail leases in which rent is based on a percentage of sales.
Percentage Rent “Provides for a rent to be paid as a percentage of retail sales, usually quarterly or annually. Often coupled with a base rent.”
Phase 1 “Preliminary investigation, usually by environmental engineer or consultant, of site’s current and past tenancies, adjacent uses, and initial assessment prior to extensive analysis of the possibility or likelihood of site contamination in any manner.”
Phase 2 “More detailed site analysis, including, but not limited to, soil borings, samplings, testing of materials found in or around site.”
Phase 3 Site remediation of contamination or hazardous or suspected hazardous materials.
Pipestem Lot A lot connected to a public street by a narrow strip of land. Usually several adjacent pipestems are combined to form one driveway with each owner having a mutual-reciprocal easement to use and maintain the driveway to the street.
PITI “Principal, Interest, Taxes and Insurance. Also called monthly housing expense.”
Planned Unit Development (PUD) A zoning category in which each of the proposed buildings or uses are approved in advance as a part of a parcel’s overall use. Usually preserves large common or open areas on a site.
Plat “A map showing the division of a piece of land with lots, streets and, if applicable, common area.”
POINTS (Loan Discount Points “Prepaid interest assessed at closing by the lender. Each point is equal to 1 percent of the loan amount (e.g., two points on a $100,000 mortgage would cost $2,000).”
Power Of Attorney “A written document authorizing another to act on his behalf as an ATTORNEY IN FACT. One does not need to be a licensed attorney to act as an attorney in fact, but power of attorney forms are powerful legal documents that should be used only under advice of a licensed attorney at law.”
Pre-Leasing The leasing of a project before construction of the project has been completed.
Premises “In commercial real estate, the description of the leasehold and the specific square footage for which the parties enter into a lease.”
Prepayment Penalty An additional charge imposed by the lender for paying off a loan before the due date.
Prime Rate The most favorable interest rate charged by lenders on short-term loans to qualified customers.
Private Mortgage Insurance (PMI) “In the event that you do not have a 20 percent down payment, lenders will allow a smaller down payment‚Äî as low as 3 percent in some cases. With the smaller down payment loans, however, borrowers are usually required to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on your loan’s structure.”
Probate Court process to prove a valid will.
Promissory Note “A written unsecured note promising to pay a specified amount of money on demand, transferable to a third party.”
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.”
Proration “Is a division of cost proportionately, based on a given period of time.”
Public Sale “Sale, auction open to the public.”
Punch List A list of incomplete or unacceptable construction items which upon remedy and completion will usually complete the obligations of the contractor under a construction contract.
Purchase Money Mortgage (PMM) Seller financing as a part of the purchase price.
Quiet Title A suit brought to remove a claim or objection on title.
Quitclaim Deed “A deed releasing whatever interest you may hold in a property but making no warranty whatsoever. Compare, SPECIAL WARRANTY DEED and GENERAL WARRANTY DEED”
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.
Real Estate Broker “A person licensed to act as an agent for another person or business to negotiate a lease or purchase of a leasehold or property, respectively, for a fee.”
Real Property “The land and anything permanently attached to the land such as buildings, parking lots, landscaping, or other items which would otherwise be classified personal property if not attached, excluding fixtures designed to be removable and reusable (see “”trade fixtures”").”
Realtor A member of the National Association of Realtors.
Reassessment Is re-evaluating the value of a property.
Recision “The cancellation of a contract. With respect to mortgage refinancing, the law that gives he home owner three days to cancel a contract in some cases once it is signed if the ransaction uses equity in the home as security.”
Recording Fees “Money paid to the lender for recording a home sale with the local authorities, thereby making it part of the public records.”
Refinance “Obtaining a new mortgage loan on a property already owned, often to replace existing loans on the property.”
Rehab Re-construction of a building or a space to bring it up to date.
“Reissue Rate “”|
1582,”"Relocation Clause” “Any clause in a lease giving the landlord the right to move the tenant within the building, during the lease period.”
Remainder “An interest in land that is postponed until the termination of some other interest such as a LIFE ESTATE. Compare, FEE SIMPLE.”
Remote Work Center “In a suburban location near concentration of employee residences, satellite office set up with varying work stations, fax, phone, and computer assistance ability.”
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 Commencement Date The date upon which the rent and usually the term of the lease begins. May be different from the lease commencement date when certain obligations must be fulfilled such as the construction of tenant improvements.
Rent Roll A list of tenants occupying space in the building.
Rent Money or something of value paid from tenant to landlord for the right to occupy space in the landlord‚Äôs property.
Rentable Area “Denotes the number of square feet in a commercial building deemed to be rentable, according to B.O.M.A.. May include a common area load factor or allowance for building amenities such as hallways and lavatories.”
Rental Rate The agreed upon rate that space is leased at.
Research Commons “Library-like setting, hub for division or section, set up with work surfaces, resources for research, or individual work space. Used in office hoteling.”
RESPA Short for the Real Estate Settlement Procedures Act. RESPA is a federal law that allows consumers to review information on known or estimated settlement costs once after application and once prior to or at a settlement. The law requires lenders to furnish the information after application only.
Reversion “A provision in a conveyance that the land will return to the grantor upon the happening of an event or contingency. Compare, FEE SIMPLE.”
Riparian Rights The rights of an owner of land adjacent to water.
Runner “Employee who remains within the office a portion of the time (i.e. outside sales, services, consultant).”
Sale-Leaseback A financing arrangement usually designed to raise capital for the property owner or obtain favorable income tax results.
SBA Small Business Administration.
Second Mortgage “A mortgage recorded after a First mortgage, ranks second in priority.”
Secondary Market A market for the purpose of purchase and sale of existing mortgages usually at discounted prices to provide greater liquidity to the mortgagee/lender.
Security Deposit “Generally, a deposit of money by a tenant with a landlord to secure performance of a lease.”
Setback Zoning requirement that requires a building or an improvement to be set back a certain number of feet from the property line.
Shadow Market “The “”unofficial”" vacancy portion of the office market caused by available sublease space and/or excess space leased but not occupied by office users.”
Shared Office Offices from 150 to 400 square feet to house 2-6 persons.
Shell Space “The interior condition of either a new or existing building without improvements or finishes. Typically denotes floor, windows, walls and roof of an enclosed premises. May include some electrical or plumbing improvements, but not demising walls.”
Single Floor Tenancy A floor occupied by a single tenant.
SIOR “Society of Industrial and Office Realtors. One of the oldest professional commercial designations in United States. Approximately 1,500 members worldwide. Emphasis on corporate office and industrial real estate.”
Sitter “Employee who remains within the office all or a majority of the time (i.e. computer staff, clerical, in-house research). (Versus the runner who is mostly out).”
SONET Synchronized Optical Network Transmission. High-speed data and multimedia transmission system to office buildings.
Space Plan A drawing representing the tenant‚Äôs build-out requirements within the desired office space.
Space Planner “One who draws the space plan, usually done by an architect.”
Spec Development “A once-obsolete term now regaining popularity, speculative developers build without preleasing or tenants in hand. Benefit to the tenants is actually seeing the finished product prior to commitment, as well as a shorter time-frame from lease execution to occupancy. Detriments include financial risk on the part of the lenders and developer if the project does not meet financial goals.”
Spec Space This is office space that is built out prior to being leased to a particular tenant. The space is considred speculative in nature.
Special Assessment Any special charge levied against real property for public improvements that benefit the assessed property.
Special Warranty Deed “The seller warrants he has done nothing to impair title but makes no warranty before his ownership. Compare, GENERAL WARRANTY DEED and QUITCLAIM DEED.”
Specific Performance A legal action to complete the performance of a contract.
Stacking Plan Schematic illustrating tenancies on a floor-by-floor basis. Useful in forecasting how to accommodate growth tenants and identifying larger blocks of space.
Statute Of Limitations The time period to file a law suit to enforce a claim or it is barred by law.
Subdivision Dividing land into lots and streets. The owner signs a PLAT and Deed of Resubdivision which is recorded among the land records. The state and county have strict requirements for subdivision of land.
Subject To “Taking title to property with a lien but not agreeing to be personally responsible for the lien, if the holder who forecloses the lien can take the property but may not collect any money from the owner who took “”subject to.”" Compare, ASSUMPTION.”
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.
Subordination Agreement “An agreement by which the tenant agrees to the priority of a mortgage over the leasehold interest, or other claim held by the tenant on the property.”
Substantial Completion The point during construction at which the contractor is ready to turn the property over to the tenant or client for acceptance and final punch list. Usually occurs upon the issuance of a certificate of occupancy.
Task Office “Team uses one office on project, different members of next team use office for next project.”
Telecommuting Equip employees to work out of house/car/client.
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 Improvement Allowance This is the amount of money the landlord is willing to contribute for the build-out of the tenant‚Äôs space. It is usually quoted as x amount of dollars per rentable or usable square feet.
Tenant Improvements Usually refer to the improvements to be done to a space to make it ready for the new tenant‚Äôs occupancy. It can also mean improvements being done by a tenant.
Tenant Representative Any <a href=?search=broker>Broker</a> or representative exclusively representing the rights of a tenant during the course of a transaction
Tenant “An individual or company that occupys space, under the terms and conditions of a lease document.”
Tenant‚Äôs Lease Any lease giving the tenant more rights than the landlord.
Tenant‚Äôs Market Normally a weak market. Slow leasing activity and lots of space available throughout the entire market.
Tenant‚Äôs Services “Those services provided to the tenant by the landlord, under the terms and conditions of the lease.”
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‚Äôs approval.
Tenants By The Entirety “A husband and wife own the property with the common law right of survivorship so, if one dies, the other automatically inherits. One may not sue the other to PARTITION the property. A creditor of one may not claim the property or the proceeds of sale. Compare, TENANT IN COMMON, JOINT TENANTS.”
Tenants In Common “Two or more persons own the property with no right of survivorship. If one dies, his interest passes to his heirs, not necessarily the co-owner. Either party, or a creditor of one, may sue to PARTITION the property. Compare, TENANTS BY THE ENTIRETY, JOINT TENANTS.”
Tenant’s Use Clause Lease language which specifies the business activities tenant will engage in at the leased premises.
Testate “To die with a Will. Compare, INTESTATE.”
Testator One who makes out a last will and testament. The feminine form is Testatrix.
Title A document that gives evidence of an individual’s ownership of property.
Title Insurance “Insurance that provides an INDEMNITY against loss or damage as a result of defect in title ownership to a particular piece of property. Title insurance covers mistakes made during a TITLE SEARCH as well as matters which could not be found or discovered in the public records such as missing heirs, mistakes, fraud and forgery. Compare, CERTIFICATE OF TITLE.”
Title Search “An examination of the public records, including court decisions, to disclose facts concerning the ownership of real estate. The title examiner prepares an ABSTRACT and the title agent prepares a BINDER but decisions regarding the legal sufficiency of title or questions requiring legal interpretation must be resolved by a licensed attorney at law.”
Touchdown Space “Areas used by individuals in informal setting such as kitchen, lounge, preferable with windows.”
Trade Fixtures “Certain fixtures installed at the premises which are unique to tenant’s business, and which may generally be removed by tenant at the end of the term of the lease.”
Triple Net Lease “A lease in which the tenant pays all expenses, including their rent.”
Triple Net “Generally refers to the requirement for the lessee to pay for its share of the property’s taxes, insurance and operating expenses.”
Trust A right to or in property held for the benefit of another. A trust may be written or implied. An implied trust is called a Constructive Trust.
Trustee One who holds property in Trust for another.
Truth-In-Lending A federal law requiring disclosure of the Annual Percentage Rate to home buyers shortly after they apply for the loan. Also known as Regulation Z.
Turn Key “Landlord-provided tenant improvements, usually including everything (walls, doors, floor and window coverings, electrical) except telecommunications wiring and tenant furniture.”
Turn-Key Buildout “Is a completed build-out of space, ready for the tenant to move into.”
Two-Step Mortgage “A mortgage in which the borrower receives a below-market interest rate for a specified number of years (most often five or seven), and then receives a new interest rate adjusted (within certain limits) to market conditions at that time. the lender sometimes has the option to call the loan due with 30 days’ notice at the end of five or seven years.”
Underwriting “The decision whether to make a loan to a potential home buyer based on credit, employment, assets, and other factors and the matching of this risk to an appropriate rate and term or loan amount.”
Unencumbered “Free of liens, or free and clear.”
UPS Uninterruptible Power Supply. A special power source which takes over in the event of a failure in the main power system.
Usable Square Feet “That space measurement actually contained within the demised premises. If the entire building is occupied by a single user, the rentable and usable square foot calculations may be the same.”
Use Purpose of occupancy.
Usury Charging more than the maximum legally permitted rate of interest.
Va Loan “A long-term, low- or no-down-payment loan guaranteed by the Department of Veterans Affairs. Restricted to individuals qualified by military service or other entitlements.”
Vacancy Factor The amount of space not occupied in the building.
Variable Rate Mortgage (VRM) See adjustable rate mortgage
Verification Of Deposit (VOD) A document signed by the borrower’s financial institution verifying the status and balance of his/her financial accounts.
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.”
Vip/Red Carpet Club “Mixed work surfaces, study carrels, fax/copy areas, varying-sized private offices, cubicles, and niche work spaces.”
Virtual Corporation “Virtual office of the future, maximum flexibility, corporate center not defined by geographical location, totally-coordinated link-up by advanced telecommunication information systems.”
Virtual Office “Not physically constrained by actual walls or housed within a building. Virtual office can be one’s home, car, or client’s office. Basically wherever you get your work done. Facilitated with cell phone, lap top, modem, and flexibility.”
Waiver Relinquishment of a right.
Walker Duct “An electrical distribution system, usually a metal trough running along set distances across the floor. Allows easier access for electrical and telecommunications wiring.”
Warranty Deed “A deed conveying the title to a property with a warranty of clean, clear marketable title.”
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.
Wet Column “A column through which plumbing can be accessed for installation of sinks, drinking fountains, etc.”
Wet Columns “Columns where the pipes are accessible for wet-bars, kitchens, and drinking fountains.”
White Box “The interior condition of either a new or existing building or suite in which the improvements generally consist of heating/cooling with delivery systems, lighting, electrical switches and outlets, lavatories, a finished ceiling, walls that are prepped for painting, and a concrete slab floor. Also called a “”vanilla box”".”
Window Bay “Usually the lineal square foot calculation to determine office sizes. Examples are 41 foot bays, which with three window bays would yield a 12 foot wide window office”
Work Letter This is usually an attachment to the lease. It indicates the materials that are considered building standard for the build-out of office space within the building and the amount of dollars the Landlord is willing to contribute towards the build-out of the Tenant‚Äôs space.
Working Drawings Are the plans from which the contractor will build your office space. These are also the plans that have received governmental approval during the permitting process.
Wraparound The debt secured includes an existing debt already on the property. The payments made to the holder of the wraparound include payments due on the existing loan and the holder must forward the appropriate portion of each payment to the existing noteholder. Often used to avoid a PREPAYMENT PENALTY or a DUE ON SALE CLAUSE. Can refer to a wraparound DEED OF TRUST or CONTRACT FOR DEED.
Zoning Ordinance The set of laws set up by the local government for the control of uses of property within the community.
Zoning Governmentally regulated permitted uses of a certain area or building. Zoning controls the type of businesses that can operate within this area.