CRE Glossary

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A


  • Absorption Rate

    The rate at which available space are sold in a specific real estate market during a given time period. It is calculated by dividing the total number of available space by the average number of sales per month. The figure shows how many months it will take to exhaust the supply of space on the market. A high absorption rate may indicate that the supply of available space will shrink rapidly, increasing the odds that a property owner will sell a piece of property in a shorter period of time.

  • Adaptive Reuse

    A building converted to a different use in order to meet contemporary demand. Examples would include a factory converted to a retail use or an office building converted to a school.

  • Air Rights

    The right to undisturbed use and control of designated air space above a specific land area within stated elevations. Such rights may be acquired to construct a building above the land or building of another or to protect the light and air of an existing or proposed structure on an adjoining lot.

  • Amps

    The basic flow of electrons in a conductor is called current. The basic unit of electrical current is measured in Amperes, often referred to as Amps. Any service rated over 400 amps is typically commercial service although 200-400 amps are generally seen in flex buildings and 800+ for heavy industrial buildings. Amps fields allow a range from low to accommodate different sources of power.

  • Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations. The three main asset classes are equities (stocks), fixed-income (bonds) and cash equivalents (money market instruments).

  • Asset Management

    The management of a client's investments by a financial services company, usually an investment bank. The company will invest on behalf of its clients and give them access to a wide range of traditional and alternative product offerings that would not be to the average investor.

  • Auction Sale

    The offering for sale of real property to the highest bidder. It's important to understand the reason for the auction. Typically this type of sale occurs in a declining market when other traditional types of sales have not been successful.

  • Availability Rate

    The availability rate is another important statistic to watch and it appears it’s this statistic that’s used interchangeably with vacancy rate, which is incorrect. The availability rate is the amount of office space available to be leased and includes: vacant space, vacant space available for sublet, occupied space available for sublet and also includes space coming available from downsizing or departing tenants within the next quarter (three month period).

  • Average Rent

    Average rent is the weighted average rent for a building or market. Rents are weighted based on the total square footage available at a rental rate. If the rental rate is zero, TBD (to be determined) or negotiable; it is not counted in the average rent. Average rent is calculated from suite-by-suite detail. However, average rent can be reconstituted by multiplying the listed average by the listed space available.

B


  • Bridge Loan

    A short-term loan that is used until a person or company secures permanent financing or removes an existing obligation. This type of financing allows the user to meet current obligations by providing immediate cash flow. The loans are short-term (up to one year) with relatively high interest rates and are backed by some form of collateral such as real estate or inventory.

  • Build to Suit

    Improvements that have been constructed to the specific desires and specifications of a particular owner or tenant (Custom Building). Typically a developer owns the land; they will enter into contract with a buyer, build the building to the buyer's specs, and then sell the buyer the land and building. Often the user is a tenant on a long-term lease and the leased fee position is sold to an investor. Renovations are not considered "Build to Suit".

  • Building Class

    The office building class designation is a way of differentiating buildings of the same building type into different categories of quality. These classes represent a combination of a subjective and objective quality rating of buildings that indicates the competitive ability of each building to attract similar types of tenants. Assigning class codes allows us to compare individual buildings within a market as well as across markets, and also to compare office market conditions between areas in peer groups.

C


  • Cap Rate

    A rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor's potential return on his or her investment. This is done by dividing the income the property will generate (after fixed costs and variable costs) by the total value of the property. If you want to get technical, it is basically the discount Central Business District- the center or core downtown area where many different types of major uses are concentrated such as retail, office, and/or residential.

  • Class A Office

    In general, a class A building is an extremely desirable investment-grade property with the highest quality construction and workmanship, materials and systems, significant architectural features, the highest quality/expensive finish and trim, abundant amenities, first rate maintenance and management; usually occupied by prestigious tenants with above average rental rates and in an excellent location with exceptional accessibility. They are most eagerly sought by international and national investors willing to pay a premium for quality and are often designed by architects whose names are immediately recognizable. A building meeting this criteria is often considered to be a landmark, either historical, architectural or both. It may have been built within the last 5-10 years, but if it is older, it has been renovated to maintain its status and provide it many amenities. Buildings of this stature can be one-of-a-kind with unique shape and floor plans, notable architectural design, excellent and possibly outstanding location and a definite market presence.

  • Class B Office

    In general, a class B building offers more utilitarian space without special attractions. It will typically have ordinary architectural design and structural features, with average interior finish, systems, and floor plans, adequate systems and overall condition. It will typically not have the abundant amenities and location that a class A building will have. This is generally considered to be more of a speculative investment. The maintenance, management and tenants are average to good, although, Class B buildings are less appealing to tenants and may be deficient in a number of respects including floor plans, condition and facilities. They therefore attract a wide range of users with average rents. They lack prestige and must depend chiefly on lower price to attract tenants and investors. Typical investors are some national but mostly local.

  • Class C Office

    In general, a class C building is a no-frills, older building that offers basic space. The property has below-average maintenance and management, a mixed or low tenant prestige, and inferior elevators and mechanical/electrical systems. As with Class B buildings, they lack prestige and must depend chiefly on lower price to attract tenants and investors.

  • Clear Height

    In an Industrial or Flex building the distance measured from the top of the finished floor to the lowest part of the roof structure. These heights will vary from building to building as they are used to measure the vertical capacity of a building for storage and/or placement of equipment.

  • Close Date

    The date that the purchase contract between a buyer and seller is completed and signed. This reflects the seller delivering the title and the buyer making full payment. AKA the date the ownership transfers from the seller to the buyer or the Contract Date.

  • Column Spacing

    Typically the minimum width and depth between columns found within an industrial building - may apply to other types of building as well. A building that is "clear of columns', AKA clear span, does not have any columns within the building.

  • Common Area

    According to BOMA, it entails the areas on a floor such as washrooms, janitorial closets, electrical rooms, telephone rooms, mechanical rooms, elevator lobbies, and public corridors which are available primarily for the use of tenants on that floor. It does not include major vertical penetrations such as elevator shafts, stairways, equipment runs, etc.

  • Condominium Conversion

    Transforming the use or ownership of property, generally income-producing real estate, e.g., converting apartments into condominiums. Conversion may involve remodeling or partitioning and relocating tenants who do not choose to buy their units. For example: when a property (multi-family, office, or industrial) is purchased for the purpose of converting it to a "for sale" property in order to sell individual units. Say a forty-unit apartment building, currently rented as apartments, is purchased for conversion to sell the individual units. The legal description may or may not reflect a condominium plan. If not, then the legal description will have to be changed. Once the individual units reflect separated legal descriptions and comply with the subdivision map act of that state, the current tenants are relocated during reconstruction/remodeling. After reconstruction, the units are listed for sale, and existing tenants at the time of the conversion are usually offered the first chance to purchase the units.

  • Consumer Price Index- CPI

    An index of the cost of all goods and services to a typical consumer.

  • Contiguous Space

    In general: Space within a building that is, or is able to be joined together into a single block of space.

D


  • Debt Service

    The annual sum of monthly payments made on a mortgage or trust deed. Depending on the type of the loan, payments are typically applied to the principal and the interest, or just interest-only.

  • Deed in Lieu Foreclosure

    Deed in Lieu of Foreclosure - Voluntary Foreclosure where the borrower voluntary returns the property ownership to the lender because the borrower does not have the means to make the payments (debt service). This is usually done to preserve the business relationship between the borrower and the lender.

  • Deferred Maintenance

    Routine property upkeep that has been neglected and repairs or replacement is needed to the existing structure. Only use as a condition if the amount of the deferred maintenance is five percent or greater based on the sale price. Deferred maintenance items often include roof, structure, HVAC and other major ticket items (Capital Expenditures). It does not generally include minor upkeep or short lived items (painting, carpeting, etc.), unless it meets the cost threshold. Also, it does not include property improvement Plans (Hospitality) or repositioning a property from Class-C to Class-B or similar marketing-based improvements. While minor upkeep items (Short-lived items) are considered in Multi-Family properties as part of normal turn-over, typically these are covered in other properties as tenant improvements. Also it's common, during the holding period, to defer these costs until the property is sold.

  • Delivered

    Total square footage and/or number of buildings that have completed construction (status changing from under construction to inventory) and received a certificate of occupancy (COO or CO) during a stated period. Once a certificate of occupancy has been issued, the property will be considered delivered whether or not tenants have occupied the space.

  • Distressed Asset

    A distressed asset is an asset that is being sold because its owner is forced to sell it. 
Distressed assets usually sell for below their perceived value due to the fact that the owner is being forced to sell.

E


  • Effective Rate

    The average rent paid over the term by a tenant adjusted downward for concessions paid for by the landlord (such as free rent, moving expenses, or other allowances), and upward for costs that are the responsibility of the tenant (such as operating expense pass throughs). Example: Effective Rent is the rental rate net of financial concessions such as periods of abated rent and includes escalations. Although there are technically several correct methods to calculate effective rental rates, the most common method employed is a simple straight-line method. For example, assuming no escalations, if a tenant signs a two-year lease at a nominal rental rate of $1.00 per square foot per month in year 1 and receives three months of abated rent inside the lease term (the tenant pays rent during only 21 of the 24 months), the effective rental rate is computed as follows: $1.00 x 21/24 = $0.88 If the abated rent is received outside the lease term (the tenant pays rent for all 24 months, but an additional three-month rent abatement period is added to the lease term), the effective rental rate is computed as follows: $1.00 x 24/27 = $0.89.

  • Energy Star

    ENERGY STAR is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy helping us all save money and protect the environment through energy efficient products and practices. See https://www.energystar.gov

  • Estate/Probate Sale

    The sale of property that was left in an estate/trust by a deceased person. The seller is the executor or executrix of the estate/trust typically named by the owner(s) of the estate/trust when it was created. (See living trust or pour-over will) Sometimes the sale is a court-approved sale that occurs during probate when the Superior Court has jurisdiction over the administration of the estate.

  • Estimated Rent

    The estimated amount the tenant pays in rent per square foot per year (or month). Based on the asking rent of building at the time the tenant moved into the current building or location.

  • Exchange

    Also known as a tax deferred exchange, the Internal Revenue Code Section 1031 provides that no gain or loss will be recognized (taxed) on the exchange of any type of business use or investment property for any other business use or investment property. Buyers and sellers must work with a qualified intermediary who specializes in section 1031 tax deferred exchanges to insure strict compliance with IRS regulations.

F


  • Flat Lease

    No escalations - the monthly rent does not increase over the life of the lease.

  • Flex Building

    A type of building(s) designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. At least half of the rentable area of the building must be used as office space. Flex buildings typically have ceiling heights under 18', with light industrial zoning. Flex buildings have also been called Incubator, Tech and Showroom buildings in markets throughout the country.

  • Flex Space

    This type of space is only found in Flex buildings. It can be used as office, medical, industrial, warehouse, distribution, quasi-retail, or research and development space.

  • For Sale Listings

    The total number of properties in the result set that were for sale on the last day of each quarter.

  • Foreign Trade Zone

    Foreign Trade Zones (FTZs) were created in the United States to provide special customs procedures to U.S. plants engaged in international trade-related activities. Duty-free treatment is accorded items that are processed in FTZs and then reexported, and duty payment is deferred on items until they are brought out of the FTZ for sale in the U.S. market. This helps to offset customs advantages available to overseas producers who compete with domestic industry. The Foreign-Trade Zones (FTZ) Board (composed of representatives from the U.S. Departments of Commerce and Treasury) has its operational staff in the International Trade Administration's Import Administration.

G


  • Gross Absorption

    For existing buildings, the measure of total square feet occupied (indicated as a Move-In) over a given period of time with no consideration for space vacated during the same time period. Sublet space and lease renewals are not factored into gross absorption. However, in a lease renewal that includes the leasing of additional space, that additional space is counted in gross absorption. Preleasing of space in non-existing buildings (Planned, Under Construction or Under Renovation) is not counted in gross absorption until actual move in, which by definition may not be any earlier than the delivery date.

  • Gross Leasable Area

    (AKA GLA) Expressed in square feet. It is the total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines. It is the standard measure for determining the size of retail spaces, specifically shopping centers, where rent is calculated based on GLA occupied. There is no real difference between RBA (Rentable Building Area) and GLA except that GLA is used when referring to retail properties while RBA is used for other commercial properties.

  • Ground Lease

    A lease agreement where the land owner (lessor) agrees to lease their land for a set period of time. Depending on the contents of the agreement, the lessor can stipulate what the lessee can and can not do with the property. The lease term is typically 20 years or more, with many being 99 years in length. The lessee pays the lessor a monthly, quarterly or annual rent payment. The lessee often constructs a building on the site and operates it or leases it as if they owned the ground in fee. At the expiration of the lease agreement, the lessor gains control of whatever is constructed on the land, unless the lease is renewed.

H


  • High Vacancy Property

    A sale of a property that had a high vacancy where absorption will be an issue for the buyer and the market value was affected. It is important to understand why the vacancy is high -- is it due to Physical or Functional Obsolescence or possibly Economic Obsolescence from outside the property. Price must be below common market levels due to prolonged vacancy or stagnant market conditions. Vacancy created from departed owner-user is generally not sufficient to qualify as high-vacancy status. High Vacancy thresholds may vary by property types, but generally will be above 50%.

  • Housing Starts

    The number of new residential construction projects that have begun during any particular month. The New Residential Construction Report, commonly referred to as "housing starts," is considered to be a critical indicator of economic strength.

I


  • Institutional Investor

    A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. Institutional investors face fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.

  • Interest Rate

    Interest is charged by lenders as compensation for the loss of the asset's use. In the case of lending money, the lender could have invested the funds instead of lending them out. With lending a large asset, the lender may have been able to generate income from the asset should they have decided to use it themselves.

J


    K


      L


      • Lease

        A legal document outlining the terms under which one party agrees to rent property from another party. A lease guarantees the lessee (the renter) use of an asset and guarantees the lessor (the property owner) regular payments from the lessee for a specified number of months or years. Both the lessee and the lessor must uphold the terms of the contract for the lease to remain valid.

      • Leased Space

        Leased space refers to all the space that currently has a financial lease obligation on it. It includes all leased space, regardless of whether the space is currently occupied or not. For example, a sublease opportunity, where the company has moved out of the space but is still paying rent on it, is counted in the leased space totals.

      • Leasehold Interest

        The lessee's interest or position in a lease. Essentially consists of the lessee's use and enjoyment of a property or space for the term of the lease, as long as they pay the rent. Leaseholds are generally the building only. Think "holds are high" and "fees are flat" (land). Leaseholds must have a cross-reference to the Leased Fee Interest in the external property notes. If a party acquires both the leased fee and the leasehold interests the interests are merged and the property is held in fee simple.

      • Leasing Activity

        Leasing activity refers to the volume of square footage that is committed to and actually signed in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in under construction, planned buildings or under renovation buildings.

      • LEED

        The Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria. See http://www.usgbc.org/

      • LIBOR

        London Inter Bank Offered Rate - The London Interbank Offered Rate is a daily reference rate based on the interest rates at which banks borrow unsecured funds from other banks in the London wholesale money market (or interbank market).

      • Lien

        An encumbrance against real property, typically used to secure payment for a debt, taxes, legal judgment or mortgage. The lien can be made against a specific property or against an owner, making it apply to all properties owned. The lien is a legal document that forces the owner to pay off debts. A lien is most often filed by banks and lenders for mortgage purposes. The property cannot be sold without the lien being removed by the person or organization that placed it. A bank or mortgage lender will file a "certificate of satisfaction" when the mortgage is paid in-full, which removes the lien. Other liens include a "mechanic's lien" which is filed by a contractor or repairman to guarantee payment for services rendered, a "utility lien" which is filed by a utility company (like water/sewer authorities) when their bills are not paid on-time, a "tax lien" which is filed by the local government when taxes are not paid or in the case of apartment buildings, a "wrongful housing lien" which is filed by a government housing authority when the owner fails to maintain the property according to the local housing code. Liens "cloud the title" to a property, making them unattractive to investors or potential buyers. In order to sell the property, all the liens must be removed; thus making the title "free and clear". If they are not removed, the property cannot be legally sold without the debts being paid off first. All liens are arranged in order by the date they were placed. This is called "position". A mortgage, mechanics lien and tax lien would be in first, second and third position, respectively. If the liens are not removed and a property is sold, the proceeds from the sale are applied to all liens. Any remaining money is then given to the seller. Most often, liens are resolved by the owner prior to sale.

      • Listing

        Short for Exclusive Listing Agreement -- a contractual agreement between an agent/broker and the owner or tenant to sell a building or land, or lease land or space in a building. Listings may contain numerous availabilities. Listings with tenants are typically for sub-leases.

      • Loading Dock

        Platforms located either on the interior or exterior of an industrial building. They are mostly level with the floor of a truck in order to allow for loading/unloading of inventory. Other terms used include "dock-high", "tailgate", or "tailboard".

      M


      • Market

        Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region. Markets can be further subdivided into Submarkets.

      • Market Rent

        The rental income that a property would most probably command in the open market.

      • Medical Building

        Special purpose multi- or single-tenant facilities with more than 50% of the demised space suitable for medical uses such as general practice, dental, surgical or other practices utilizing interior improvements not generally found in business support facilities are known as medical properties. Prominent physical characteristics include a greater number of wet stacks and special power requirements used for laboratory testing and other medical procedures common in doctors' offices. A notably high parking ratio usually accompanies the space. This sub-type of office property is generally leased to medical users only.

      • Mezzanine Financing

        Mezzanine financing is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies.

      • Mixed Use

        Mixed-use development is—in a broad sense—any urban, suburban or village development, or even a single building, that blends a combination of residential, commercial, cultural, institutional, or industrial uses, where those functions are physically and functionally integrated, and that provides pedestrian connections.

      • MSA

        Metropolitan Statistical Area. A geographic area with a large population nucleus and includes adjacent counties which have a high degree of economic and social integration with that nucleus. A MSA with a population of more than one million, may qualify to be classified as a Primary Metropolitan Statistical Area (PMSA).

      • Multi-Family (Apartments)

        Structure(s) typically containing five or more dwelling units that may also include common areas and facilities, e.g., entrances, lobby, elevators or stairs, mechanical space, walks, grounds, recreational facilities, and parking both covered and open. Multi-Family (Apts) Style 1-3 Stories, 4 or more buildings = Garden 1-3 Stories, 1-3 buildings = Low-Rise 4-14 Stories, 1 or more buildings = Mid-Rise 15+ Stories, 1 or more buildings = High Rise Multi-Tenant Any type of building designed to accommodate two or more tenants.

      N


      • Net Absorption

        For existing buildings, the measure of total square feet occupied (indicated as a Move-In) less the total space vacated (indicated as a Move-Out) over a given period of time. Sublet space and lease renewals are not factored into net absorption. However, in a lease renewal that includes the leasing of additional space, that additional space is counted in net absorption. Pre-leasing of space in non-existing buildings (Planned, Under Construction or Under Renovation) is not counted in net absorption until actual move in, which by definition may not be any earlier than the delivery date.

      • Net Lease

        A provision that requires the tenant to pay a portion or all of the taxes, fees and maintenance costs for the property in addition to rent. Net lease requirements are most commonly used with commercial real estate. There are three primary types of net leases: single (net), double (net-net) and triple (net-net-net). 

Also referred to as a closed-end lease.

      • Net Operating Income NOI

        The actual or anticipated rental income remaining after all operating expenses are deducted from effective gross income, but before debt service and capital expenditures are deducted.

      • New (or Shell) Space

        Space that has never been occupied or built out.

      • Note Purchase

        When a buyer gains an ownership position by purchasing the note (Loan) and not the property directly. Often this occurs prior to Foreclosure, after which the buyer takes over the property.

      O


      • Occupancy Status

        The occupancy status of the tenant. The options are as follows: Leased: Tenant leases currently occupied space. Subleased: Tenant subleases currently occupied space. Month-to-Month: Tenant occupies current space on a month-to-month basis. Owned: Tenant owns currently occupied space. Pending: The tenant is in the process of renegotiating their lease and the status is pending.

      • Occupied Space

        Occupied space is defined as the square footage of space that is physically occupied by a tenant. It does not include space that is under a lease obligation, where the tenant does not actually occupy the space.

      • Other Income

        Any additional sources of revenue not from renting space; such as parking, laundry or vending machines. This section of the cash flow analysis may also include any charges passed thru to the tenant, known informally as "pass-throughs" or formally as recaptured or recovered expenses.

      • Out Parcel

        (Also known as a Pad) ICSC defines out parcels as unused portions of a shopping center's site that constitute the perimeter areas, not including the center facility or parking lot, and that may be used or developed for similar or non-similar purposes. Out parcels are often developed to provide banking, fuel, and/or eating services as a compliment to the main center's existing tenant mix.

      • Owner Occupied

        The building's owner must occupy at least 75% of the rentable space in the building to be considered owner occupied.

      P


      • Parking Ratio

        The parking ratio indicates how many parking spaces the building has per 1,000 square feet: (# of spaces x 1,000)/rentable building area.

      • Pass Through

        Used to define those cases where a landlord passes certain expenses onto the tenant in addition to the rent. Typically, it applies to a full service gross lease where the tenant and the owner have agreed to an expense stop. The stop is the maximum amount the owner will pay each year and any expenses over the stop amount will be passed through to the tenant in addition to the rent. AKA Recaptured or Recoverable Expenses.

      • Pension Fund

        A fund established by an employer to facilitate and organize the investment of employees' retirement funds contributed by the employer and employees.

      • Percent Leased

        The percentage of space in a specific building that has been leased or pre-leased. This applies to buildings that are under construction or proposed, as well as existing buildings Percent Leased = (Total Space Leased / Rentable Building Area) x 100.

      • Percentage Rent

        A lease with rent based on a percentage of the monthly or annual gross sales made on the premises. There may be no minimum rent, but most specify a guaranteed minimum rent with the percentage, or graduated percentage rent payable on sales that exceed a specific level. The percentage can be fixed throughout the life of the lease or it can be a graduated percentage that increases based on lease specifications. It appeals to tenants in that, if sales performance is poor, they benefit from having a reduced rent. In a sense the property owner shares in the business risk as well as the upside. Percentage leases are common with large retail stores, especially in shopping centers. The underlying concept of the percentage lease is that both the landlord and the tenant should share in the location advantages of the leased property.

      • Price Per SF Net

        Example: 5000 SF of land sold for $1,000,000 and the assessed improvement ratio (supplied by the assessment office) is 80%. Take the inverse of the Improvement ratio to generate a land ratio of 20%. Calculate the value of the land when using the land ratio against the sales price. ($1,000,000 X 20%=$200,000) That value is then divided by the land area to come up with a Net $/SF for land. (e.g., $200,000/5000 = $40 Price per SF Net).

      • Price Per Square Foot

        (Improved Properties) The sale price divided by the rentable square feet of the building.

      • Primary Contact

        The highest-ranking officer for a tenant at this location.

      • Property Manager

        An individual or company responsible for the day-to-day functioning of a piece of real estate. Property owners typically hire property managers when they are unwilling or unable to manage the properties themselves, perhaps because they live out of town, don't have the time or don't wish to be hands-on about the investment.

      • Property Type

        Designations used by CoStar to group property into groups based on the presence of improvements, structural characteristics of those improvements, and on the tenant use or intended use of the improvements. When properties and tenants are logically grouped by these categories, users can more efficiently search for data that meets their business needs, statistics can be generated and compared, and analysts can report on past trends and forecast future growth and decline patterns.

      Q


        R


        • Recapitalization

          A term used when the owner is attempting to refinance his position by selling part of his equity in order to liquidate part of his equity position. This may not be a 100% interest transfer or a voluntary process.

        • Redevelopment

          Redevelopment is any new construction on a site that has pre-existing uses.

        • REIT

          Real Estate Investment Trust. A real estate mutual fund, allowed by income tax laws to avoid corporate income tax. It sells share of ownership and must invest in real estate or mortgages. It must meet certain other requirements, including number of shareholders, widely dispersed ownership, asset and income tests. If it distributes 95% of its income to shareholders, it is not taxed on that income, but shareholders must include their share of REIT's income in their personal tax returns.

        • Rent

          Asking or Face Rent. This represents the amount for which the landlord is offering their space per square foot, per year for lease for a listing. The amount for which the tenant will be responsible is negotiated between the tenant and landlord. Rents will vary depending upon the services provided. For example, full service rents are significantly higher than triple net (see Services).

        • Rentable Building Area

          (AKA RBA) Expressed in square feet, this area includes the usable area and its associated share of the common areas. Typically rents are based on this area. It is the space the tenant will occupy in addition to the associated common areas of the building such as the lobby, hallways, bathrooms, equipment rooms, etc. There is no real difference between RBA and GLA (Gross Leasable Area) except that GLA is used when referring to retail properties while RBA is used for other commercial properties.

        • Rental Rates

          Rental rates are defined as the annual rental costs for a particular space quoted on a per square foot basis. Rental rates are based on the rentable square footage of a property. They are calculated by taking the annual rental obligation of a particular space divided by the rentable square footage of that space. Rental rate totals are calculated on a weighted average of the size of the space. That is, the bigger the square footage of a particular space, the more heavily that space's rental rate will factor into the overall rental rate calculation.

        • REO

          Real Estate Owned. A sale in which a lender, either institutional or private is selling a property that they had taken back through foreclosure.

        S


        • Sale Leaseback

          The sale of a property by its owner to another party and the subsequent leasing back of the property by the seller. A tactic that allows a property owner to convert his properly ownership (equity) into cash while still occupying the property. Seller (now Tenant) lease term must be two or more years.

        • SF/Employee

          The average number of square feet per employee based on the total square feet occupied divided by the number of employees at this location. This does not apply to tenants in industrial buildings.

        • Short Sale

          When a sale price is less than the amount owed to the lender and the lender accepts this amount as full payment of the loan. Those funds not repaid to the lender will be written off.

        • Single Tenant

          A building occupied by one tenant only. If an entire building is available for lease with a future availability date, or if one company leases a vacant building, then it is single-tenanted.

        • Space Use

          How the current tenant uses the occupied space. The options are as follows: Office: This space is used for office purposes. Industrial: Space used exclusively for industrial purposes. Retail: Space is used for retail purposes. Medical: Space is used exclusively or primarily for medical offices. Medical offices require special services, laboratory support, etc. They also require a large number of visitors' parking space. Medical space is considered a subset of office space and is counted as such. Flex: the type of space is only found in Flex buildings. It can be used as office, warehouse storage space, for quasi-retail or research and development. Warehouse: A subset of Industrial and Flex space, warehouse space is used exclusively for storage.

        • Submarket

          Submarkets are divisions of the primary market that are generally recognizable to the real estate industry and the business community by the names given to the areas. Submarkets are defined by specific geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Submarkets are building type-specific and are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the entire market. They contain a number of properties sufficient to provide meaningful information for aggregate statistics.

        T


        • Time Vacant

          Time Vacant is defined as the building's average time between the date that the property becomes vacant and the date that the new tenant actually moves in, for all of move-ins during the quarter. Then take the median time vacant for all buildings in the quarter.

        • Total Available SF

          Total available is defined as all of the space that is available for lease, regardless whether it is currently vacant, on the last day of each quarter.

        • Total Rentable

          All space in a building that may be leased and occupied regardless of the type of building or the space use.

        • Triple Net Lease

          A lease agreement that designates the lessee (the tenant) as being solely responsible for all of the costs relating to the asset being leased in addition to the rent fee applied under the lease. The structure of this type of lease requires the lessee to pay for net real estate taxes on the leased asset, net building insurance and net common area maintenance. The lessee has to pay the net amount of three types of costs, which how this term got its name.
 This type of lease can also be referred to as a "net-net-net lease" or a "hell or high water lease".

        U


        • Urban Infill

          In the urban planning and development industries, infill has been defined as the use of land within a built-up area for further construction, especially as part of a community redevelopment or growth management program or as part of smart growth.

        • Usable Building Area

          This consists of the space that the tenant will actually occupy in a building. The usable area on a single floor may vary depending upon corridor configurations, whether the floor is a single tenant or multiple tenant occupancy, etc. It is the rentable area minus the common areas of the floor such as lobbies, hallways, and bathrooms.

        • Utilities

          Gas, Electric, Sewer, and Water - Type and capacity.

        V


        • Vacancy Rate

          The vacancy rate is a numerical value calculated as the percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time. It is the opposite of the occupancy rate, which is a calculation based on the percentage of units in a rental property that are occupied.

        • Vacant Available Space

          Space which is currently vacant and is currently being marketed as available space. Vacant space only speaks to the occupancy of a space without regard to whether there is a lease obligation tied to that space.

        • Vacant Space

          Vacant space refers to all space not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done would also be considered vacant space. Vacant space could also be quoted in one of three ways, as new, relet or sublet. New space, sometimes called first generation space, refers to space that has never been occupied by a tenant before. Relet space, sometimes called second generation space, refers to space that has previously been occupied by another tenant. Sublet space refers to space that has been leased by another tenant, is still under a lease obligation by that tenant, but is being offered for lease back to the market by the tenant with the lease obligation.

        W


        • Warehouse

          A secondary type of industrial building generally used for storage and/or distribution.

        • Weighted Average Rent

          The average rental rate for all spaces within a building or a market, with the average being skewed, or weighted, according to the size of the space available (the larger the space, the more that particular rental rate counts in the average). The weighted average is calculated by multiplying the square footage of each unit by its asking rental rate to obtain the total asking rent for each space, then totaling the rents for each space and dividing that sum by the total square footage for all units. Negotiable rental rates and rental rates of zero are excluded in this calculation.

        X


          Y


          • Year Built

            The year an existing building was completed. For "Under Construction" and "Proposed" buildings, this is the scheduled completion date.

          • Year Established

            The year that the tenant began operations in the region.

          • Year Renovated

            The year a building's last renovation was completed.

          • Years at this location

            The number of years that the tenant has occupied space in the current building.

          • Years in Business

            Represents the number of years that the tenant has been in operation in this region.

          Z


          • Zero Cash Flow Investment

            A highly-leveraged property with a long-term investment-grade triple net lease guaranteed by an investment-grade credit tenant. Typically, the lease term is 20 years or more with at least a BBB credit rating. The term "Zero Cash Flow" or "Zeros" refers to the fact that initially all of the property's net operating income goes toward the loan payment. The financing is assumable, fixed-rate, non-recourse, and often fully amortizing. At the end of the loan term, the property is owned free and clear of debt. It is also a low cost method to obtain tax benefits associated with the ownership of real estate, especially for investors looking for a quick and efficient completion of a 1031 or 1033 tax deferred exchange. Many times the property can be refinanced and the equity can be cashed out and deployed to other properties outside the confines of the exchange.

          • Zoning

            Legislative regulations specifying allowable uses of land and controlling the construction of improvements with cities or counties. Common designations are "C" for commercial (retail and office), "M" or "I" for industrial and "R" for residential (R1 single family, R2 low density multi- family, R3 & R4 higher density multi-family). Zoning regulations are unique to specific areas and designations may differ.