Commercial Property Cheat Sheet

Commercial property is used for business purposes. Some examples of commercial properties include industrial properties, shopping centers, farms, offices, paintball ranges or even empty land.

Commercial Property Terminology:

Absorption
The amount of inventory or units of a specific commercial property type that become occupied during a specified time period (usually a year) in a given market, typically reported as the absorption rate.
Anchor tenant
A tenant with brand & name recognition that will attract other tenants and shoppers.
Certificate of Occupancy (CO)
A certificate issused by a local goverment certifying a building's compliance with applicable building codes and other laws, and indicating it to be in a condition suitable for occupancy.
Certified General Appraiser
A person certified to appraise a commercial property. Requirements differ by state.
Commercial Broker
A commercial broker is a person Responsible for helping clients sell and purchase commercial properties
Commercial Property
Commercial property is used for business purposes. Some examples of commercial properties include industrial properties, shopping centers, farms, offices, paintball ranges or even empty land.
Commercial Mortgage Broker
A commercial mortgage broker is a person who brings mortgage borrowers and mortgage lenders together. Most are paid around 1% of the loan amount.
Commercial Mortgage Loan
A commercial mortgage loan is a mortgage loan secured by commercial property that creates revenue. The commercial mortgage loan is often used to acquire new commercial property, refinance, or redevelop existing commercial property.
Commercial Property Manager
A commercial property manager often manages of property that is owned by another party or entity. Job duties can include marketing, maintenance, accouting, paying taxes and collecting rent. Pay includes salary and sometimes commision.
Cost of Occupancy
Expenditures that are required to assume and maintain occupancy of a space. Such expenditures include rent and/or mortgage payments, and recurring costs, such as real estate taxes, repairs, operating expenses, and other outgoings directly resulting from the use of the property
Escalation Clause
Escalation Clause is a clause in a lease which allows a landlord to increase the rent in the future to reflect updated expenses paid by the landlord, such as taxes, utilities, & other operating costs
Gross Lease
A gross Lease is a lease in which the tenant pays a flat sum for rent, covering all landlord-paid expenses, including taxes, insurance, maintenance, utilities
Letter Of Intent
Letter Of Intent is an informal & preliminary agreement between the tenant & the landlord indicating intent to move forward with negotiations.
Rentable Area
The computed area of a building as defined by the guidelines of Building Owners and Managers Association (BOMA) and typically measured in square feet, including both core/structure and useable area. The actual square foot area for which the tenant will pay rent. It is the gross area of an office building, less uninterrupted vertical space (such as stairways and elevators). Unlike useable area, rentable area includes common areas such as lobbies, restrooms, and hallways as well as the measurement of structural columns and architectural projections
Rentable-to-Useable Ratio
Defined as rentable area divided by useable area. Also known as the add-on factor or load factor. Also see efficiency percentage.
Usable Square Footage
The actual space you occupy from wall to wall
Tenant Improvements
Tenant Improvements outlines any improvements to the leased space by or for a tenant. If you plan to make multiple improvements to the space, it’s worth negotiating these with your landlord and trying to get as much of these costs covered. The Tenant Improvement (TI) Allowance defines the fixed amount that the landlord will contribute towards these improvements, and costs over this amount are then covered by the tenant.

2015 Consumer Reviews




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