Glossary - Gordon Commercial Real Estate Brokerage

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Base Rent The minimum monthly rent due under the lease - usually calculated on a per- square-foot-per-year basis.


Base Year First year of the lease.


the interior building of a renter's space whether brand-new building and construction or the reconfiguration of existing space.


Commission The cost paid to a genuine estate broker for his/her services rendered in a genuine estate deal.


Common Area Maintenance (CAM) An additional, annual charge typically evaluated to tenants for upkeep of the residential or commercial property's "typical area". Includes interior products; entryways, corridors or bathrooms, and exterior items; parking lot, grounds and outside painting.


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


Consumer Price Index (CPI) A measure of inflation as figured out by the US Federal Government by utilizing a "basket of products". Used in leases as an objective standard for the estimation of escalations.


Effective Rent Equals agreement rent less free rent and any cash allowances such as a lease buyout or moving allowance. Escalations written into the lease are included in the computation of efficient lease. Tenant enhancement allowances and brokerage commissions are not subtracted from the agreement rate in computing efficient rent.


Escalation Leases typically include escalations or stepped increases in lease to be paid by the occupant to the proprietor at a specific future date. This can be yearly, for instance, year 5 of a 10-year lease, or set to an index such as CPI.


Full Service Lease Lease type in which proprietor pays all expenditures 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 area of a building by determining from the outside of its exterior walls and consisting of all vertical penetrations, such as elevator shafts. Also includes basement space.


HVAC Acronym for heating, ventilation and air conditioning.


Industrial Gross (IG) Lease Lease key in which renter pays most however not all business expenses in the base rate. In addition to base lease, tenant pays utilities, typical area maintenance, and typically the increase in residential or commercial property taxes and insurance over base year.


Industrial Space Space in buildings zoned for commercial usages. Not readily available for office usage unless a modification of usage permit is filled and authorized by the planning department.


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


Lease Commencement Date Date upon which the lease commences and the commitments of the parties start (see likewise "lease commencement 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 company. Improvements completely connect to the facilities unless they are trade fixtures, and they stay with the properties after completion of term of the lease.


Lessee Tenant.


Lessor Rental residential or commercial property owner or proprietor.


Load Factor The quantity of square footage in a lease, in addition to an occupant's functional square video footage, which represents renter's pro rata share of the building's common area/s. May likewise be referred to as a percentage of structure's rentable square feet.


Office Space Category Office space is loosely classified based upon the quality of building and construction, features and the status of area:


Class A. Most prestigious buildings completing for leading workplace users with leas above average for the location. Buildings have high quality standard finishes, cutting-edge systems, exceptional accessibility and a definite market presence.


Class B. Buildings competing for a wide range of users with rents in the typical variety for the area. Building surfaces are fair to helpful for the location and systems are adequate, but the building can not complete with Class A at the same cost.


Class C. Buildings completing for occupants requiring practical area at leas listed below the area average.


Operating Expenses Costs associated with earnings producing residential or commercial property normally before interest and earnings tax expenditure, however including residential or commercial property taxes, insurance, repair work and upkeep, replacement reserves.


Pass-Through Expense An expense connected with tenancy in which proprietor "travels through" to tenant specific boosts in building operating costs happening after a base year in the lease.


Permitted Uses Contact City to see what's allowed at the area.


Quotas A zoning system overseen by the City of Berkeley where just a particular variety of particular uses are allowed in the district at any one time, and a few of these usages are also subject to square footage limitations. Quotas are in result in the Elmwood, Telegraph Avenue and Solano Avenue areas.


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


Renewal Option Lease language that offers the methods for tenant to give property manager notification of its intent to renew (extend) the lease.


Rent Basis Designates what operating costs are included and excluded in the lease. The most common lease bases are:


Full Service: All costs of operation are paid by the property manager approximately a base year. Tenant pays boosts in operating expenditures over the base year.


Triple Net (NNN): All expenses of operation including, however not limited to, property tax, insurance and typical location upkeep are borne by the renter on a pro rata basis.


Modified Gross (MG): any plan whereby the occupant pays several of the costs covered by the property owner in a Complete lease, but not all of the expenses as in a Triple Net lease. Modified Gross rents cover a series of lease types and terminologies utilized in numerous markets around the country. A few of the more typical are Industrial Gross, Single Net and Double Net. The definitions of these bases differ from market to market depending upon the expenditures they include or leave out.


Net of Electric: A popular form of Modified Gross, this resembles a Complete Service lease, however the occupant spends for his or her electric charges either to the utility company (according to a meter) or to the property owner on a pro rata basis.


Rent Commencement Date Date upon which the lease and normally the regard to the lease begins. May be various from the lease beginning date when certain responsibilities should be satisfied such as the building of tenant improvements.


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


Retail Space typically booked for retail usage. May likewise be offered for office usage.


Down payment Deposit of cash by a renter with a property manager to secure efficiency of a lease. Generally equal to one month of rent.


Setback Zoning requirement that requires a structure or an improvement to be held up a specific variety of feet from the residential or commercial property line.


Sublease Sublease space is used on the market by the current renter for sublease, regardless of whether the space is occupied or uninhabited. Often a sublease tenant is subject to property owner approval.


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