Glossary of Commercial Real Estate Terms: M-R
  1. Market Value The highest price a property would command in a competitive and open market under all conditions requisite to a fair sale with the buyer and seller each acting prudently and knowledgeably in the ordinary course of trade.
  2. month-to-month: A lease for a specific period of time, usually one month, which automatically renews itself for the same period of time, unless landlord or tenant provide notice to terminate.
  3. net lease: Structured such that a base rent for a rental property is paid to landlord. In addition, other charges such as utilities and building property taxes, insurance and maintenance are also payable by tenant. Sometimes referred to as triple net or absolute net lease.
  4. open listing: A listing given to any broker without liability to compensate any broker except the one who first secures a buyer who is ready, willing and able to meet the terms of the listing, or secures the acceptance by the landlord of a satisfactory offer; the lease of the property automatically terminates the listing.
  5. operating expenses: The costs associated with operating income producing property usually before interest and income tax expense, but including property taxes, insurance, repairs and maintenance, replacement reserves.
  6. option: A term in a lease for the rights either tenant or landlord may have with respect to one another, usually with stipulations regarding timing of those rights.
  7. pass-through expense: An expense associated with tenancy in which landlord "passes through" to tenant certain increases in building operating expenses occurring after a base year in the lease.
  8. percentage rent: Provides for a rent to be paid as a percentage of retail sales, usually quarterly or annually. Often coupled with a base rent.
  9. planned unit development (PUD): A zoning category in which each of the proposed buildings or uses are approved in advance as a part of a parcel's overall use. Usually preserves large common or open areas on a site.
  10. premises: In commercial real estate, the description of the leasehold and the specific square footage for which the parties enter into a lease.
  11. real estate broker: A person licensed to act as an agent for another person or business to negotiate a lease or purchase of a leasehold or property, respectively, for a fee.
  12. renewal option: Lease language that provides the means for tenant to give landlord notice of its intent to renew (extend) the lease.
  13. rentable square footage Rentable square footage equals the usable square footage plus the tenant's pro rata share of the building common areas, such as lobbies, public corridors and restrooms. The pro-rata share, often referred to as the rentable/usable (R/U) factor, will typically fall in a range of 1.10 to 1.16, depending on the particular building. Typically, a full floor occupancy will have an R/U factor of 1.10 while a partial floor occupancy will have an R/U factor of 1.12 to 1.16 times the usable area.
A-F
G-L
M-R
S-Z