Glossary of Commercial Real Estate Terms: A-F
- ad valorem: (According to value) which refers to the value of property used in the computation of taxes.
- as-is: The existing condition of real estate, prior to any improvements contemplated under a lease.
- attorn: To transfer to another or to agree to recognize a new owner of a property and to pay them rent.
- base rent: The minimum monthly rent, usually computed on a per- square-foot-per-year basis, due under the lease (see percentage rent).
- base year: A specific year of a lease against which certain rent escalations and additional expense reimbursements to landlord may be calculated.
- build-out: Refers to the interior construction of a tenant's space whether new construction or the reconfiguration of existing space.
- build-to-suit A customized design and build approach to a tenant's space usually resulting in a single occupant building which is then leased or sold to the tenant.
- certificate of occupancy: Presented by city building department to landlord or tenant after completion of tenant improvements and satisfactory inspections by city building department inspectors.
- commission: The fee paid to a real estate broker as procuring cause and/or for his or her services rendered in a real estate transaction. May be paid by either party in a transaction; it is usually governed by a prior written agreement.
- common area maintenance (CAM): An additional, annual charge often assessed to tenants for maintenance of the property's "common area", such as its entryways, hallways or bathrooms.
- estoppel certificate: A statement concerning the status of an agreement, (usually a lease) and the performance of obligations under the agreement. A third party such as a lender, relies on the statement (which is usually unilaterally executed by the tenant) for such things as making a loan on property.
- flex space: A building providing use flexibility between office, and other uses such as manufacturing, laboratory, warehouse, etc. Usually provides high bays and relocation flexibility for overhead doors and other entrances.
- first refusal right or right of first refusal (Purchase) A lease clause giving a tenant the first opportunity to buy a property at the same price and on the same terms and conditions as those contained in a third party offer that the owner has expressed a willingness to accept.
- full service rent An all-inclusive rental rate that includes operating expenses and real estate taxes for the first year. The tenant is generally still responsible for any increase in operating expenses over the base year amount.
