Above Standard Tenant Improvements:Improvements that exceed the building standard (see building standard)
Agent: One who acts for another as a fiduciary. A real estate license can act as an agent for another in real property transaction (See Transaction Broker)
Assignment: A transfer of an interest in real property, in this case, the leasehold interest.
Anchor Tenant: A large retail tenant that draws traffic to the shopping center
Base Rent: An amount of rent before adding any escalations.
Base Year: Usually the first year of a lease to which future operating expenses are compared for the purpose of calculating expense increases.
Building Class: Class A normally post—1960 construction, Class B pre—1960 construction. Also used subjectively to describe the quality of a property. Class A excellent overall; Class B good overall, Class C older with some functional detects; Class D deteriorated needing renovations.
Building Standard: the quality level of the materials the building is offering tenants for use in constructing the tenant improvements.
Build-out: The proposed construction for a new or renovated suite.
Capitalization: A method of determining property value based upon income.
Capitalization Rate: The percentage rate applied to the net income to determine value. Also known as Cap Rate.
Certificate of Occupancy: Issued by governing authorities certifying the right to occupy a property.
Common Area: Building or project areas used in common with other tenants including service areas such as maintenance rooms, janitorial closets. etc.
Consumer Price Index: A governmental index used in determining the cost of goods and services. Used in leases to prevent the erosion of income by escalating the rent payable annually.
Default: The failure to comply with an obligation required under the lease contract may or may not be monetary.
Demising Walls: The walls that separate one tenant from another or from the common areas.
Drop Dead Date: The date by which, if the premises are not delivered, the tenant may terminate the lease.
Effective Rent: The average of all the years of the rent after deducting any landlord concessions such as free rent or over Standard tenant improvements.
Escalations: The means by which a lease provides for increases in rent for recovery of operating costs or tax increases during the term of a lease.
Estoppel Certificate: A certification by tenant that the lease is full force and effect and confirming the economics of the lease.
Expense Stop: Used to cap the amount the landlord is willing to pay to cover a particular expense or group of expenses such as operating expenses.
First Right of Refusal: Grants a tenant the first right to match an offer to buy or lease a property or premises, or refuse such an offer, After an offer has been tendered by a third party.
Full Service Rent: An all-inclusive rent covering rent, operating expenses taxes and lessor’s insurance subject to escalations when these expenses increase after the first year of the lease.
High Rise: 25 story buildings or greater.
Hold Over Tenant: A tenant in possession after the lease term expiration.
HVAC: Heating. Ventilating, and Air Conditioning Systems.
Low Rise: Building with six stories or less.
Master Lease: The controlling lease covering a property may control a subsequent lease or leases such as a sublease or assigned lease.
Mid Rise: Seven to 24 story buildings.
Mixed Use Project: More than one use within a project such as office and retail: office and hotel: office and apartments:retail and apartments.
Mullions: Material used to divide window lines to allow for the attachment of walls in creating rooms.
Non-competition Clause: Prevents the owner from leasing space to another tenant that competes with an existing tenant.
Non-Disturbance: Protects a tenant from loss of its premises in the event of default by another party. If the owner is foreclosed, a non-disturbance agreement from the lender protects the tenant. If a sub-lessor defaults on a lease, non-disturbance agreement from the owner protects the sub-tenant.
Notice of Lease Term Commencement: A document executed between owner and tenant defining the actual date the lease commenced, which may or may not define a new expiration date.
Novation: To make new such as a new lease agreement in lieu of a sublease or assignment of a lease.
Parking Ratio: The number of parking spaces available per 1.000 square feet of space leased, or for an entire project.
Pass-throughs: Operating expenses and/or tax increases paid by tenant under a lease agreement are said to be passed-through to tenant.
R&D Building: A combination of office and production space as might be used for research and development.
Renewal Option: Grants the tenant the right but not the obligation to renew under specified terms and conditions.
Security Deposit: A deposit made by a tenant to a landlord to secure tenant’s promise to perform its obligations under the lease.
Space Plan: The preliminary space design defining the tenant’s space requirements, often includes furniture layouts.
Tenant Improvements: Improvements made to a property to make the space suitable for the tenant’s intended use. whether paid for by landlord or tenant.
Transaction Broker: A brokerage firm or broker, which work with either both parties, or individually, in an effort to arrive at an agreement on the sale or rental of real estate. A Transaction Broker facilitates the closing of a transaction but does not have an agency relationship with either of the parties.
Work-letter: A list of the quantity and type of component parts that will be used to construct tenant improvements, usually provided by landlord to secure a tenant for a property.
Working Drawings: A complete set of plans, normally developed after lease execution, defining the precise layout and construction of the premises. suitable for obtaining permit and true costs.