GLOSSARY
Select a Letter below to view a glossary of terms.A
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A
Abatement
Often and commonly referred to as free rent or early occupancy and may occur outside or in addition to the primary term of the lease.
Above Building Standard:
Upgraded finishes and specialized designs necessary to accommodate a tenant's requirements.
Absorption:
The rate, expressed as a percentage, at which available space in the marketplace is leased during a predetermined period of time. Also referred to as "Market Absorption".
Absorption Rate:
The net change in space available for lease between two dates, typically expressed as a percentage of the total square footage.
Ad Valorem:
According to value. This is a tax imposed on the value of property (references a general property tax), which is typically based on the local government's valuation of the property.
Add-On Factor:
Often referred to as the Loss Factor or Rentable/Usable (R/U) Factor, it represents the tenant's pro-rata share of the Building Common Areas, such as lobbies, public corridors and restrooms. It is usually expressed as a percentage which can then be applied to the usable square footage to determine the rentable square footage upon which the tenant will pay rent.
Allowance Over Building Shell:
Most often used in a yet-to-be constructed property, the tenant has a blank canvas upon which to customize the interior finishes to their specifications. This arrangement caps the landlord's expenditure at a fixed dollar amount over the negotiated price of the base building shell. This arrangement is most successful when both parties agree on a detailed definition of what construction is included and at what price.
Anchor Tenant:
The major or prime tenant in a shopping center, building, etc.
Annual Percentage Rate (APR):
The actual cost of borrowing money, expressed in the form of an annual interest rate. It may be higher than the note rate because it represents full disclosure of the interest rate, loan origination fees, loan discount points, and other credit costs paid to the lender.
Appraisal:
An estimate of opinion and value based upon a factual analysis of a property by a qualified professional.
Appreciation:
The increased value of an asset.
"As-Is" Condition:
The acceptance by the tenant of the existing condition of the premises at the time the lease is consummated. This would include any physical defects.
Assessment:
A fee imposed on property, usually to pay for public improvements such as water, sewers, streets, improvement districts, etc.
Assignment:
A transfer by lessee of lessee's entire estate in the property. Distinguishable from a sublease where the sublessee acquires something less than the lessee's entire interest.
Attorn:
To turn over or transfer to another money or goods. To agree to recognize a new owner of a property and to pay him/her rent. In a lease, when the tenant agrees to attorn to the purchaser, the landlord is given the power to subordinate tenant's interest to any first mortgage or deed of trust lien subsequently placed upon the leased premises.
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