Property Management Terms – Flashcards
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Base "Base Rate"
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Dollar amount per square foot per year
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Base Rent
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Rent due to the landlord, fixed amount
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Building Classes
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Building type based on rent, finishes, standards, efficiency, amenities, location, etc.
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Capital Expenditure
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Capital projects that are not in the operating budget and improves the property. (new roof, TI, or parking lot)
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Commercial Real Estate
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property that can be bought or sold (residential, office or industrial)
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Common Area
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areas of a building (and its site) that are available for all its tenants (lobbies, corridors)
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Common Area Maintenance (CAM)
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Charges paid by tenant for upkeep of common areas (split between tenant(s))
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Due Diligence
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Examining a property, documents, and procedures conducted by a third party to reduce risk. Investigation that can determine if the actual conditions do or do not reflect the information as represented.
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Fixed Expenses
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Costs that stay constant with a building's occupancy rate. (property taxes, insurance, and some forms of building maintenance.)
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Fixed Leases
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A lease in which the lessee pays a fixed rental amount for the duration of the lease.
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Gross Leasable Area (GLA)
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The total floor area designed for tenant occupancy GLA is the area on which tenants pay rent; it is the area that produces income. (useable)
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Gross Lease
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A lease in which all expenses are paid by the landlord. (associated with owning and operating the property) Also see net lease.
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Inventory
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The supply or stock of a given commodity or a listing thereof.
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Landlord
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The lessor or owner of the leased property.
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Tenant Improvement
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The total cost (outlay) of tenant improvements paid by the landlord to accommodate the tenants.
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Lease
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A contract that creates the relationship of landlord and tenant.
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Lease Buyout
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The process by which a landlord, tenant, or third party pays to extinguish the tenant's remaining lease agreement.
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Lessee
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The person renting or leasing the property. Also known as a tenant
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Lessor
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The person who rents or leases a property to another. Also known as a landlord.
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Load Factor
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The ratio of rentable area to useable area. It is also known as the add-on factor. Formula: (Rentable square feet / Useable square feet) - 1= LF
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Loss Factor
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percentage difference between rentable area — the number of square feet that office tenants pay for — and usable area. Formula: LF = (R-U)/R
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Neighborhood Analysis - Location Analysis - Market Analysis
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The process of evaluating whether a general location meets the requirements of being both possible and practical for an office space
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Moving Allowance
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A specified dollar amount paid by the owner to cover, in part or in whole, tenant moving expenses
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Net Lease
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A lease in which the tenant pays, in addition to rent, all operating expenses such as real estate taxes, insurance premiums, and maintenance costs. Also see gross lease.
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Occupancy Cost
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dollars paid out by the tenant to occupy the space. (rent, real estate taxes, personal property taxes, insurance on building and contents)
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Low-Rise
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Fewer than seven stories high above ground level.
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Mid-Rise
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Between seven and twenty-five stories above ground level
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High-Rise
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Higher than twenty-five stories above ground level. [BOMA]
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Operating Expenses
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Expense to operate and maintain a property. real estate taxes, property insurance, property management and maintenance expenses, utilities
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Percentage Lease
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A lease in which the rent amount is based on a percentage of gross sales (monthly or annually) made by the tenant.
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Percentage Rent
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The additional rent (over a base amount) that is paid by tenants to owners on tenant sales over a specified dollar amount
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Rent Concession
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A period of free rent given to the tenant by the lessor.
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Rent Escalators
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Items in a lease that may increase by predetermined amounts at certain times or by a constant annual percentage. base rent, operating expenses, and taxes
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Rentable Area
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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 (such as stairways and elevators). common areas such as lobbies, restrooms, and hallways and columns Rentable Area = Useable area / (1-Loss Factor) R = U / (1-LF)
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Rentable to Usable Ratio
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Defined as rentable area divided by useable area. Also known as the add-on factor or load factor
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Replacement Cost
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The estimated cost to construct a building with utility equivalent to the building being appraised using modern materials
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Sublease
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A lease in which the original tenant (lessee) sublets all or part of the leasehold interest to another tenant (known as a subtenant)
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Tenant/ Lessee
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A person or entity who has possession of the property through a lease
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Tenant-Paid Tenant Improvements
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The total cost (outlay) of necessary tenant improvements paid by the tenant netted against any allowance provided by the landlord.
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Tenant Improvement Allowance From Owner
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Cash Flow Form with a specified amount of money the owner will pay for tenant improvement.
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Useable
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area that is available for the exclusive use of the tenant. Useable area = rentable area - (building loss factor x rentable area) U = R - (LF x R)
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Vacancy
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The number of units or space that are vacant and available for occupancy (usually expressed as a vacancy rate).
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Vacancy Rate
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The percentage of the total supply of units or space of a specific commercial type that is vacant and available
