Glossary - Gordon Commercial Real Estate Brokerage

Base Rent The minimum month-to-month lease due under the lease - typically computed on a per- square-foot-per-year basis.


Base Year First year of the lease.


Build-Out Describes the interior construction of a renter's area whether brand-new construction or the reconfiguration of existing space.


Commission The cost paid to a realty broker for his or her services rendered in a property deal.


Common Area Maintenance (CAM) An extra, annual charge typically examined to renters for maintenance of the residential or commercial property's "typical location". Includes interior items; entryways, corridors or restrooms, and exterior items; parking lot, premises and outside painting.


Cost of Living Increases Increase to base rent connected to boosts in US Department of Labor Consumer Price Index (CPI).


Consumer Price Index (CPI) A procedure of inflation as identified by the US Federal Government by using a "basket of items". Used in leases as a neutral standard for the estimation of escalations.


Effective Rent Equals agreement rent less free lease and any cash allowances such as a lease buyout or moving allowance. Escalations composed into the lease are consisted of in the calculation of efficient lease. Tenant enhancement allowances and brokerage commissions are not deducted from the contract rate in computing effective lease.


Escalation Leases typically include escalations or stepped boosts in lease to be paid by the renter to the landlord at a specific future date. This can be annually, for example, year 5 of a 10-year lease, or set to an index such as CPI.


Complete Lease Lease enter which property manager pays all costs consisting of taxes, utilities, janitorial, etc in the base rent. Tenant pays boosts in operating costs over the base year.


Gross Square Feet Usually refers to gross location of a structure by measuring from the beyond its outside walls and including all vertical penetrations, such as elevator shafts. Also consists of basement space.


HVAC Acronym for heating, ventilation and cooling.


Industrial Gross (IG) Lease Lease key in which occupant pays most but not all operating costs in the base rate. In addition to base lease, occupant pays energies, typical area maintenance, and frequently the increase in residential or commercial property taxes and insurance coverage over base year.


Industrial Space Space in structures zoned for industrial uses. Not available for workplace usage unless a change of use license is filled and authorized by the preparation department.


Lease Kind of legal contract establishing a residential or commercial property owner-tenant relationship.


Lease Commencement Date Date upon which the lease commences and the obligations of the celebrations begin (see likewise "lease beginning date").


Lease Term Length of the lease.


Leasehold Improvements Construction or improvements for the function of preparing the premises for the conduct of occupant's service. Improvements permanently connect to the facilities unless they are trade components, and they remain with the properties after the end of regard to the lease.


Lessee Tenant.


Lessor Rental residential or commercial property owner or proprietor.


Load Factor The amount of square video footage in a lease, in addition to a renter's usable square footage, which represents renter's professional rata share of the building's typical area/s. May also be referred to as a portion of building's rentable square feet.


Office Space Category Office area is loosely categorized based upon the quality of building and construction, functions and the status of location:


Class A. Most prestigious buildings completing for premier workplace users with leas above average for the location. Buildings have high quality standard finishes, state of the art systems, extraordinary ease of access and a certain market presence.


Class B. Buildings contending for a wide variety of users with rents in the for the area. Building surfaces are reasonable to helpful for the location and systems are sufficient, however the structure can not take on Class A at the same cost.


Class C. Buildings completing for occupants requiring practical space at rents listed below the location average.


Operating Expenses Costs related to income producing residential or commercial property usually before interest and income tax expenditure, however consisting of residential or commercial property taxes, insurance coverage, repair work and upkeep, replacement reserves.


Pass-Through Expense A cost related to tenancy in which property manager "travels through" to occupant certain boosts in structure operating expenses happening after a base year in the lease.


Permitted Uses Check with City to see what's permitted at the area.


Quotas A zoning system managed by the City of Berkeley where just a particular variety of specific uses are permitted in the district at any one time, and a few of these usages are likewise subject to square footage limitations. Quotas are in impact in the Elmwood, Telegraph Avenue and Solano Avenue locations.


Real Residential or commercial property Taxes Taxes due on building and structural elements.


Renewal Option Lease language that supplies the ways for renter to offer property owner notification of its intent to restore (extend) the lease.


Rent Basis Designates what operating costs are included and omitted in the lease. The most typical rent bases are:


Full Service: All expenses of operation are paid by the proprietor up to a base year. Tenant pays boosts in business expenses over the base year.


Triple Net (NNN): All costs of operation including, but not restricted to, property tax, insurance coverage and typical area upkeep are borne by the tenant on a professional rata basis.


Modified Gross (MG): any arrangement whereby the occupant pays one or more of the expenditures covered by the proprietor in a Full Service lease, but not all of the expenditures as in a Triple Net lease. Modified Gross rents cover a variety of lease types and terms used in numerous markets around the country. Some of the more typical are Industrial Gross, Single Net and Double Net. The meanings of these bases vary from market to market depending on the expenditures they include or exclude.


Net of Electric: A popular type of Modified Gross, this is like a Complete lease, but the tenant pays for his or her electric charges either to the energy company (according to a meter) or to the property manager on a professional rata basis.


Rent Commencement Date Date upon which the lease and normally the term of the lease begins. May be various from the lease commencement date when specific responsibilities need to be fulfilled such as the building of tenant improvements.


Rentable Area Denotes the number of square feet in a business structure considered to be rentable. May include a typical location load aspect or allowance for building amenities such as corridors and lavatories.


Retail Space generally booked for retail usage. May likewise be readily available for workplace usage.


Down payment Deposit of money by an occupant with a landlord to secure performance of a lease. Generally equivalent to one month of lease.


Setback Zoning requirement that needs a structure or an improvement to be set back a specific variety of feet from the residential or commercial property line.


Sublease Sublease space is used on the marketplace by the current occupant for sublease, no matter whether the space is occupied or uninhabited. Often a sublease occupant undergoes property manager approval.


Triple Net (NNN) Lease key in which the lessee pays for its share of the residential or commercial property's taxes, insurance, typical location maintenance, and their own operating costs.