Glossary of Commercial Real Estate Terms
A written document that transfers or conveys title to property.
The walls that designate the perimeter of an office suite and/or separate one office suite from another. A demising wall is typically constructed slab-to-slab and is both sound conditioned and fire resistant.
Direct Charge of Operating Expenses
On a triple net, or net/net/net (NNN) lease where the Tenant does not pay costs directly, the Landlord bills Tenants periodically for a pro rata share of building operating expense costs.
Double Net Lease
An agreement whereby the Tenant has agreed, in addition to a rent payment, to pay separately for two of the maintaining or operating expense items that would otherwise be paid for by the Landlord for maintaining and operating the building and providing office space to the Tenant.
A suspended ceiling attached to the underside of the floor above; comprised of metal grid and ceiling tiles in either a 2-foot x 2-foot or 2-foot x 4-foot size.
The right of an individual or entity to use the land of another individual or entity, usually for a specific purpose. For example, utility companies’ right-of-way across an individual’s property permits the utility to both install and maintain the necessary conduit, wires, pipes, etc.
The dollar per square foot per year amount that a Tenant pays on an average over the entire term of a lease. Example: a 5-year or 60-month lease with 6 months’ free rent offers a 10% discount from the face rate; hence, the Effective Rate based on a gross rate of $10.00 per rentable square foot per year would equal $9.00.
The percent (%) of rentable area that is actually usable area. A 90% efficient building offers 900 usable square feet for every 1,000 rentable square feet. Note: Efficiency and Common Area or (Load Factor) are not the same.
A series of elevators which serve only certain designated floors in an office building.
Clauses in a lease contract that provide for increases (or decreases) in rent payment according to fluctuations of the operating costs and expenses as defined by the lease.
The allocation of building operating expenses in a triple net lease, or a proportionate share of the increases in building operating expenses to a Tenant on a gross lease.
A predetermined and identified dollar amount — either on a per square foot per year basis, or a pro rata share basis — of total building operating expenses that a Landlord is responsible to pay. Any increases in building operating expenses above the expense stop are the responsibility of the Tenant.
Used to describe how a Tenant’s payment for rent or service shall increase (usually on an annual basis). On a lease an escalator can be anything that measures the change in the cost of money or goods and services. It is also the term used to describe a moving staircase.
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