Glossary of Commercial Real Estate Terms
The first year’s rental rate, often identified as the annual rent in a gross office lease. Also, can refer to the net annual rental rate, which excludes any building operating expenses, in a triple net (NNN) lease, particularly with respect to retail or industrial building leases.
The year of building operation, usually a calendar year, in which the Landlord “fixes” or identifies the operating costs that are included in a gross or semi-net lease. Increases in operating expenses above the base year are passed through to Tenants, based on their pro rata share of a building.
Binding Letter of Intent
A letter of intent that a court of law would uphold as the actual leasing of space by the Tenant from the Landlord and by the Landlord to the Tenant regardless of whether an actual lease document was agreed to or signed.
A universal term for architectural or construction documents originating from a photographic type reproduction having white lines on a blue background. Today actual prints are blue or black lines on a white background and are known as diazo prints.
BOMA Standard Measurement
A defined measurement of space established by the Building Owners & Managers Association (BOMA).
An individual who acts on behalf of another person as an agent to locate, negotiate for lease, purchase or sell office space, buildings, land or any other real estate. A broker is licensed by each state (including the District of Columbia). The broker license requires passing written proficiency tests and working a minimum number of years for another broker. The broker license requires that an additional minimum number of real estate-related professional education credits be earned each year (or other specified time period). There is only one principal broker for each real estate office. All other brokers (called associate brokers) and salespersons work on behalf of the principal broker. The principal broker is the only agent empowered to receive and disburse the commissions and fees earned for a real estate transaction.
Providing an individual to act on behalf of another person as an agent to locate and negotiate for the purchase, sale or lease of real estate. A broker performs a unique service of matching a purchaser and seller of real estate and, in effect, is the catalyst that makes a real estate transaction happen. Also, brokerage is the term for the fee or commission paid to a broker at the conclusion of a real estate transaction.
The “guts” of a building, which normally includes building elevators, restrooms, smoke towers, fire stairs, mechanical shafts, janitorial closets, telephone equipment rooms, etc. Building cores are usually centered, or on the side/offset.
Standard dimensions within leased areas dictated by the spacing between window mullions or building interior columns. A 5-foot module dictates private office widths in multiples of 5-feet.
Building Standard Work Letter
A list and/or detailed specifications of the construction items (both quantity and quality) that will be provided by the developer to be used in building out a Tenant’s office space. The building standard work letter might specify the number of standard office walls that will be provided and their construction type (for example, one linear foot of standard ceiling-high partition will be provided for every 10 square feet of rentable space; this partition will consist of half-inch gypsum board attached to three inch aluminum studs) or the number of electrical outlets to be provided (for example, one electrical outlet will be provided for every 125 square feet of rentable space). The building standard work letter is available to a potential Tenant before a lease is executed and should be made part of the lease.
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