Commercial Real Estate
Washington DC Commercial Real Estate
A well-known business tenant with
a very high credit rating, or one whose national or local name
will lend prestige to a shopping center or office
An estimate of the rate at which a
particular classification of space-such as new office space,
new housing or new condominium units-will be sold or occupied
over a measured period of time. Positive absorption occurs when
there is less space available and negative reflects the
converse. A prediction of this rate is often involved in a
feasibility study or an appraisal in connection with a request
The formula used to determine a
property's taxes and operating expenses for
Add On Factor
A formula that translates a
tenant's usable square footage to a landlord's rentable square
footage. The formula is the common area divided by the usable
area. The add on factor value is usually between 5% and
The practice of representing
either the buyer or the seller.
The right to use the space above a
specific property. These rights can be leased, sold or
The paying off of a debt by
periodic installments over a specific period of
An estimate or opinion of value of
a property. Also, the act of estimating value.
The value of real property
established for the purpose of computing real property
The transfer of the right, title
and interest in the property or lease of one person or entity
(assignor), to another (assignee). There are assignments of,
among other things, mortgages, sales contracts, deeds, leases
The agreement of a party to
recognize a third party as a permissible successor party to a
contract; most often, the agreement of a tenant to pay rent to
a new landlord, especially a mortgagee who has
The specific date that a property
will be ready for occupancy.
A detailed financial statement
setting forth personal or corporate assets, liabilities, and
net worth (the difference between assets and liabilities) as of
a specified date.
The rental cost without including
escalations, electricity charges and other negotiated
The year that serves as a point of
reference for reflecting the change in an index.
Formal submission of a proposal to
purchase property or perform pre-defined work under specific
conditions at a cost noted in the proposal.
The first expression of an intent
to enter into an agreement.
Building and Office Manager's
Association. National organization of more than 4,000
professionals in the high-rise office building industry, with
80 local BOMA associations.
An understanding or contract in
which a landlord or lessor agrees to finish a certain space to
the specifications of a lessee or according to the landlord’s
established standards in return for a lease commitment on the
part of the prospective tenant.
A clause that may be included in a
lease, granting the lessor or the lessee the right to terminate
the lease term upon the happening of certain stated events or
occurrences upon notification and in most cases
The rate of interest used in
calculating the present value of future periodic
The amount of square feet that can
be utilized for people and furniture.
A building structure where a core
of elevator banks, emergency staircases, plumbing, electricity
and HVAC is located in the center of the building. This center
core allows for a traditional layout of perimeter offices on
all sides of the building.
A document issued by an insurance
company to verify coverage.
A certificate issued by a
governmental authority indicating that a building is fit for a
specific type of occupancy and there are no building code
These buildings are constructed of
the highest quality materials and are very well designed. They
are sought by prestigious tenants. These buildings are superbly
maintained and very well managed.
These buildings offer useful space
without special amenities. They are usually very functional in
layout and design, though not unique. Generally, the
maintenance and management is average to good.
These buildings are older and
typically offer space without amenities. The maintenance,
management and HVAC are average to below average.
A dollar amount paid by an owner
to a broker for arranging a transaction.
The areas of a property that are
used by all tenants or owners, e.g. stairways, lobby,
lavatories, mechanical shafts.
An agreement between a landlord
and tenant X where the landlord agrees not to rent other units
in a building to another tenant(s) for the same business
purpose as tenant X.
A building's capability to provide
high speed internet connections, contingent upon the building's
A financial inducement to a lessee
that is provided by the lessor to cover the cost, in whole or
in part of preparing a structure for the lessee’s occupancy.
This allowance could cover costs, such as for partitions,
wiring, lighting and standard carpeting.
A space that is adjacent to and/or
adjoining to another space.
The transfer of title or an
interest in real property by means of a written instrument such
as a deed or an assignment of lease.
An escalation formula that
increases the tenant's rent obligation for building operating
expenses in proportion to changes in the Consumer Price Index
A lease drawn directly between the
tenant and the owner of the property.
Direct Operating Cost
A type of escalation where the
landlord simply passes on to the tenant the actual increases in
The expenses incurred in the
operation of an office building, such as utilities, cleaning,
supplies, insurance and maintenance.
The method by which the tenant
pays the utility company directly.
Thermometer instrument that
measures the amount of heat in the air by the expansion of a
liquid in a graduated glass tube with a reservoir bulb at one
end, and by use of a bimetallic strip which moves the indicator
on a scale when heat causes the two metals to expand at
different rates on the other end. Normally used for outdoor
A fair, proper and due degree of
care and activity. An expressed or implied condition in certain
real estate contracts stating that a person use good-faith
efforts to perform obligations under a contract.
There are three methods that
landlords use to charge for electricity: directly metered
electric, sub-metered electric and rent inclusion.
The right of government or
quasi-government agencies to take private property for a
necessary public use, with just compensation paid to the
Any claim or lien attached to and
binding on real property that may lessen value, obstruct, or
impair the use of a property, that may or may not prevent
transfer of title, and/or right or interest in
Electric Rent Inclusion
The rent increase, calculated in
accordance with the specific method formula agreed upon in the
lease to pay for building operating expenses.
The process where a disinterested
third party holds money and/or documents until the terms and
conditions of the instructions (as prepared by the parties to
the escrow) have been met.
A signed statement by a party,
such as a tenant or mortgagee, verifying for the benefit of
another party that a certain statement of facts is correct as
of the date of the statement, such as that a lease exists, that
there are no defaults and that rent is paid to a certain date.
Delivery of the statement by the tenant prevents (estops) the
tenant from later claiming a different state of
A written agreement giving a sole
agent the right to sell or lease a property for a specified
time, but reserving to the owner the right to sell the property
himself without owing a commission.
The representative of the tenant,
purchaser or owner who is granted the exclusive right to
negotiate a transaction on that party's behalf.
A written listing of a real
property where the seller agrees to appoint only one broker to
sell or lease the property for a specified period of
The act of making a document
legally valid, such as formalizing a contract by signing, or
acknowledging and delivering a deed. In some cases,
implementation of a document may refer solely to the act of
signing; in other cases it may refer to complete performance of
the document’s term.
The right of the tenant to lease
additional space under specified terms and
A relationship that implies a
position of trust or confidence wherein one party is usually
entrusted to hold or manage property or money for
The ratio of a building’s floor
area to its corresponding land area. Determined by dividing the
total floor area of the building by the lot area, it is used in
zoning ordinances as a formula to regulate building
The configuration of the building
floor, typically shown on a diagram, to show structure and core
A legal procedure whereby property
used as security for a debt is sold to satisfy the debt in the
event of default in payment of the mortgage note or default of
other conditions in the mortgage document.
The amount that a dollar figure
set at one date will be worth at a future
A construction specialist who
enters into a formal contract with a developer to construct a
real estate building or project.
The capacity of the
Bona fide; an act is done in good
faith if it is in fact done sincerely, whether negligently or
An agreed-on time after an
obligation is overdue during which a party can perform without
being considered in default.
A person who receives a conveyance
of real property from a grantor.
The person transferring an
interest in real property to a grantee.
In commercial leasing, the gross
floor area is the entire square footage within the floor’s
perimeter, calculated to the inside finish of the permanent
outer building walls or to the glass line in newer buildings,
with no allowance made for structural projections and with a
required minimum ceiling height of 71⁄2 feet.
A lease of property under which
the lessee pays fixed rent and proportionate increases above a
base amount established for real estate taxes and operating
costs. Typically assessed on a per annum or fiscal
The costs that go into the
physical improvement of the premises, e.g., HVAC,
telecommunications, wiring/cabling, furniture, fixtures,
A tenant that stays on the leased
premises after his or her lease has expired.
Heating, ventilating and air
Valuable additions made to
property that add up to more than repairs, costing labor and
capital, and are intended to enhance the value of the
Income and Expense
A financial report showing the
income from the property, operating expenses and the amount
distributed to the owner.
A company that provides immediate
office space and business guidance for new
To restore to the victim a loss,
in whole or in part, with payment, repair, or
A lien formed by operation of law,
such as a real property tax lien, judgment lien or mechanic’s
Joint and Several
A situation in which more than one party is liable for
repayment of a debt or obligation and a creditor can obtain
compensation from one or more parties, either individually or
jointly. There is usually a right of contribution among persons
who are jointly and severally liable, so that the person who is
actually forced to repay the debt can try to collect equal
amounts from the others who also are liable.
The formal decision of a court on the respective rights and
claims of the parties to an action or suit. A judgment that has
been entered and recorded with the county recorder usually
becomes a general lien on the property of a
A purely statutory general lien on real and personal property
belonging to a debtor. A judgment lien differs from a mortgage
in that a judgment lien does not have a specific parcel of real
estate given as security at the time that the debtor-creditor
relationship is created.
Arranged construction materials
that are delivered to the building site unassembled but
complete and ready to be assembled and
A package offered to a tenant to
sign a lease, which might include periods of free rent,
workletter, lease takeover or other such incentives.
An agreement written or unwritten
transferring the right to exclusive possession and use of real
estate for a definite period of time.
The summary of the lease drawn
between the landlord and the tenant.
Insert your budgeted dollars per
square foot and your required square footage. This tool will
compute your company's monthly additional rent
The initial draft of a lease
setting forth the terms used as a starting off point for
The number assigned by our website
to an individual lease for identification purposes.
The landlord's right to recapture
the premises leased to a tenant under certain conditions,
typically when a tenant proposes to assign or sublease its
The landlord's assumption of a
tenant's rights and obligations under a pre-existing lease at
The length of time for a tenant to
occupy a property according to the lease.
The party responsible for leasing
space in a building on behalf of an owner. The leasing agent
sometimes acts as the managing agent.
The person to whom property is
rented or leased.
The person who rents or leases
property to another (lessee).
An agreement or commitment by a
bank (issuer) made at the request of a customer (account
party), that the bank will honor drafts or other demands of
payment from third parties (beneficiaries) upon compliance with
the conditions specified in the letter of credit. Through the
issuance of its letter of credit, the bank agrees to pay the
seller’s draft, hereby, substituting the bank’s credit for that
of the buyer.
The expression of a desire to
enter into a contract on specified terms and conditions without
assuming any binding obligations.
A charge or claim that one person
has on the property of another person as the security for a
debt or obligation.
Amount of money a bank will lend
to one of its most reliable and creditworthy customers without
the need for a formal loan submission. A customer’s line of
credit is subject to periodic reviews of the customer’s credit
standing and the overall banking relationship.
The term used to define the
general area (i.e. downtown, midtown, midtown south, upper east
side and upper west side).
The percentage of the space
attributed to the common areas of the building, or the
proportional share of common areas attributed to a specific
Lease expiration date.
The care and work put into a
building to keep it in operation and productive use; the
general repair and upkeep of a building. Delayed maintenance
contributes to a building’s loss in value.
The party responsible for managing
the property on behalf of the owner. This is sometimes the same
as the leasing agent.
A group of properties that would
be alternatively competitive to a given typical
Features of the marketplace,
including (but not limited to) relative rental costs, interest
rates, demographics, employment levels, vacancy rates and
The price a buyer, willing but not
compelled to buy, would pay. Also known as the lowest price a
seller, willing but not compelled to sell, would
Meeting of the
Mutual assent or agreement among
the parties to a contract regarding the substance of the
contract. If the parties by their words and acts manifest an
intention to be bound to a contract, they can be held
In a mortgage deal, the party who
receives and holds a mortgage as security for a debt; the
lender; a lender or creditor who holds a mortgage as security
for payment of an obligation.
The one who provides a mortgage as
security for a debt; the borrower; usually the landowner,
though it could be the owner of a leasehold estate; the
borrower or debtor who hypothecates or puts up his or her
property as security for an obligation.
Contiguous areas showing common
characteristics of population and homogeneity of land
Net Cost of
The total cost of occupying a
property for a period, including base rent, electricity,
escalations, construction, amortization, and all other cost
A lease under which the tenant
pays expenses, such as taxes, insurance and maintenance in
addition to the base rent.
A guarantee by a third party to
whom the landlord is obligated that the tenant's rights under
the lease will not be affected by the landlord's default in
such obligations to such third party.
The components of net cost of
occupancy other than base rent.
The percentage of a defined
market, submarket, or building that contains
A non-binding representation by
one party to act or perform in a specified manner provided that
the other party acts or performs in the manner requested. An
offer displays an intention to enter into a contract, as
opposed to merely inviting offers from others, as with a
A building usually separated into
individual offices, used primarily by companies to conduct
The construction of a building or
other developments within the boundaries of a property, thus
increasing the property’s value.
Those property management tasks
that must be performed on the premises being
Those recurring expenses that are
essential to the continuous operation and maintenance of a
property. Operating expenses are generally divided into the
following categories: fixed expenses such as real property
taxes and building insurance, variable costs such as utilities,
payroll, administration and property management fees, and
reserves for replacement. Operating expenses do not include
items such as mortgage payments, certain capital expenditures
An agreement to remain open, for a
set period, an offer to sell or lease real property.
The payment in full of an existing
loan, typically at the time of refinancing or upon the sale or
transfer of a secured property.
A lease whose rental is based on a
percentage of the monthly or annual gross sales made on the
premises. Percentage leases are common with large retail
A plan displaying the layout of
improvements on a property site; a plot. The plot plan usually
includes location, dimensions, parking areas, landscaping and
Proof of real estate licensure,
sometimes called a “wallet card,” issued by the state real
estate licensing agency.
An escalation method that charges
additional rent per square foot according to changes in the
hourly wage and/or fringe benefits package specified under the
building owner's labor union agreement.
The act of either actually or
constructively possessing or occupying the premises.
Available space that is used for
ready-to-go offices on demand. This space may be rented on a
The amount that a dollar figure
payable in the future is worth at the present time.
Maintenance procedures conducted
to prevent later repairs and extending a useful
The tenant's proportionate share
of the total space.
The number assigned to an
individual property for identification purposes. This number
allows the customer to quickly access specific building
information through our search page.
Construction status of a building:
existing, under construction or proposed.
Per Square Foot
The process of reviewing a
prospective borrower's credit and payment capacity before
approving a loan.
A deed of conveyance that
operates, in effect, as a release of whatever interest the
grantor has in the property; sometimes called a release deed.
The quitclaim deed contains similar language to a deed, with
the important exception that rather than using the words grant
and release, it contains language such as "demise, release and
A fair length of time that may be
permitted or required for an act to be completed, considering
the nature of the act and the surrounding
Real Estate Board of New
A recapture provision in an office
lease provides the lessor the right to recover any space that
the tenant is unable to occupy or sublease.
A lease condition giving the
landlord the right to relocate a tenant.
The right of a tenant to extend
its tenancy under specified terms and conditions.
Adjustment of rent by the lessor
to replicate changes in cost of living or property maintenance
Rent Inclusion of
A method of charging an office
tenant for electricity based on its estimated usage per square
foot, rather than its measured usage.
A list of tenants showing the unit
occupied and the rent paid by each. Certified rent rolls are
independently confirmed and are sometimes required by
Rentable Square Feet
The square footage used to
determine a tenant's base rent. Often a landlord uses a “rubber
ruler” to increase the size of the space.
Fixed periodic payment made by a
tenant or occupant of property to the owner for the possession
and use thereof usually by the prior agreement of
Request for a proposal.
Right of First
The right of a person to have the
first opportunity either to purchase or lease real
Right of First
The right of a tenant to match an
offer to lease or buy space if an offer is made by a third
Vertical supply pipes that may be
used for the distribution of electricity and voice and data
The portion of a rate of return on
an investment that is assumed to cover the risk associated with
that deal. The greater the risk, the higher the capitalization
Preliminary architectural drawings
and sketches often prepared at the planning stages of
development; basic layouts not containing the final details of
Moneys or other consideration
(e.g., letter of credit) given to a landlord from a tenant as
security for performance of the tenant's obligations under the
A lease provision which permits
the tenant to remedy the landlord's failure to meet obligations
by purchasing the needed services and deducting the cost from
A building structure where the
core containing elevator banks, emergency staircases, plumbing,
electricity, and HVAC are located on one side of the building
allowing for an open area in the middle of the floor and
perhaps three sides for windowed offices.
Signs placed on the inside or
outside of a building to advertise one's company.
A flat, horizontal reinforced
concrete area, typically the interior floor of a building but
also an exterior or roof area.
Costs paid to professionals for
services to improve a premises.
Concrete Stories' tool that
calculates your total office area based on your selection of
offices, cubicles, conference rooms, reception areas, and other
applicable areas, and taking into account all add on
The method by which the tenant
pays the landlord for all utility charges. This includes a
markup for administration.
A clause in which the holder of a
mortgagee permits a subsequent mortgagee to take
An agent of a person who is
already acting as an agent for a principal. The original agent
can delegate authority to a subagent where such designation is
either expressly authorized or customary in the
A builder or contractor who enters
into an agreement with a developer or the prime contractor to
execute a special portion of the construction work, such as
electrical, plumbing, air-conditioning installations, carpentry
A lease drawn between a tenant and
a subtenant. This is another method of transferring tenants
rights under which the tenant's obligations to the landlord are
The act or process by which a
person’s rights or claims are ranked after those of others;
e.g. a second mortgagee’s rights are subordinate to those of
the first mortgagee.
Additional rent charged to tenants
who consume utility services (gas, water, electric) in excess
of the amounts permitted in the terms of the lease.
A reduction in the amount of real
estate taxes obtained by the owner petitioning the taxing
authorities. The lease should provide for these benefits
to be passed to the tenant.
Money or other financial
inducement to a lessee that is provided by the Lessor to
cover the cost in whole or in part of preparing a
structure for lessee’s occupancy.
An agreement, usually in the form
of a letter, containing the basic material economic terms
to be incorporated into a lease agreement between the
landlord and tenant.
Time is of the
A contract clause that emphasizes
timely performance as an essential requirement of the
contract. Thus, if any party to the instrument does not
perform within the specified time period (the “drop-dead”
date), that party is in default, provided the non
defaulting party has made a valid tender of
A document containing information from both the landlord and
the tenant to easily record the negotiation process until a
final lease agreement is met.
A net-net-net lease where, in addition to the stipulated rent,
the lessee assumes payment of all expenses associated with the
operation of the property. This contains both fixed expenses,
such as taxes and insurance, and all operating expenses,
including costs of maintenance and repair.
The rate at which tenants move in and out of a rental building.
A high turnover rate results in added expenses to the
The manner for which commercial space will be used; for
example: retail, office or industrial.
Strong enough persuasion to
completely overpower the free will of another and prevent him
or her from performing intelligently and voluntary.
Space in a “shell” condition
excluding dividing walls, ceiling, lighting, air-conditioning,
floor covering and the like. In leasing raw office space, the
landlord often provides the building with standard items and/or
a construction allowance.
On a multi-tenancy floor, the
gross area minus core space. Core space includes the square
footage used for public corridors, stairwells, washrooms,
elevators, electrical and janitorial closets, and fan rooms. On
a single-tenant floor, the usable area is the gross square
footage excluding building lobby and all penetrating shafts
(i.e. ducts, stairwells and elevators).
Rentable Square Footage less the
loss factor. (i.e., core and common area)
An allowance or discount for
estimated vacancies (unrented units) in a rental project. The
vacancy and loss in rent factor is important in assembling an
investment income analysis of a property, such as an apartment
The equitable lien of the grantor
on the land conveyed, in the amount of the unpaid purchase
price. Unlike a mortgage, it is not an absolute interest in the
property, but is only an equitable right to rely on in case all
of the purchase money is not paid.
Wear and Tear
The gradual physical deterioration
of property, resulting from use, passage of time and from
weather. Only property subject to wear and tear is eligible for
cost recovery. Generally, a tenant must return the leased
premises to the landlord in good condition, ordinary wear and
The contribution made by the
landlord toward the cost of the tenant installation which may
be provided in dollars, in labor and materials or in other
Industry slang for lease
A periodic tenancy in which the
rent is reserved from year to year. Where the tenant holds over
after the first year, he or she normally creates another
The return on an investment or the
amount of profit, stated as a percentage of the amount
invested; the rate of return.
regulation of structures and uses of property within
designated districts or zones. Zoning regulates and
affects such things as use of the land, lot sizes, types
of structures permitted, building heights, total floor
area of a building, setbacks and density (the
ratio of land area to improvement