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Dedicate:
To appropriate private property to public
ownership for a public use.
Deed:
A legal instrument transferring title to real
property from the seller to the buyer upon the sale of such property.
Deed In Lieu Of Foreclosure:
A deed given by an
owner/borrower to a lender to satisfy a mortgage debt and avoid foreclosure. See
also "Foreclosure".
Deed Of Trust:
An instrument used in many states in place
of a mortgage by which real property is transferred to a trustee by the borrower
(trustor), in favor of the lender (beneficiary), to secure repayment of a debt.
Default:
The general failure to perform a legal or
contractual duty or to discharge an obligation when due. Some specific examples
are:
1) Failure to make a payment of rent when due.
2) The breach or failure to
perform any of the terms of a lease agreement.
Deficiency Judgment:
Imposition of personal liability on a
borrower for the unpaid balance of mortgage debt after a foreclosure has failed
to yield the full amount of the debt.
Demising Walls:
The partition wall that separates one
tenant’s space from another or from the building’s common area such as a public
corridor.
Design/Build:
A system in which a single entity is
responsible for both the design and construction. The term can apply to an
entire facility or to individual components of the construction to be performed
by a subcontractor; also referred to as “design/construct”.
Depreciation:
Spreading out the cost of a capital asset
over its estimated useful life or a decrease in the usefulness, and therefore
value, of real property improvements or other assets caused by deterioration or
obsolescence.
Distraint:
The act of seizing (legally or illegally)
personal property based on the right and interest which a landlord has in the
property of a tenant in default.
Dollar Stop:
An agreed dollar amount of taxes and operating
expense (expressed for the building as a whole or on a square foot basis) over
which the tenant will pay its prorated share of increases. May be applied to
specific expenses (e.g., property taxes or insurance).
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Earnest Money:
The monetary advance by a buyer of part of
the purchase price to indicate the intention and ability of the buyer to carry
out the contract.
Easement:
A right of use over the property of another
created by grant, reservation, agreement, prescription or necessary implication.
It is either for the benefit of adjoining land (“appurtenant”), such as the
right to cross A to get to B., or for the benefit of a specific individual (“in
gross”), such as a public utility easement.
Economic Feasibility:
A building or project’s feasibility
in terms of costs and revenue, with excess revenue establishing the degree of
viability.
Economic Rent:
The market rental value of a property at a
given point in time, even though the actual rent may be different.
Effective Rent:
The actual rental rate to be achieved by
the landlord after deducting the value of concessions from the base rental rate
paid by a tenant, usually expressed as an average rate over the term of the
lease.
Efficiency Factor:
Represents the percentage of Net
Rentable Square Feet devoted to the building’s common areas (lobbies, rest
rooms, corridors, etc.). This factor can be computed for an entire building or a
single floor of a building. Also known as a Core Factor or Rentable/Usable (R/U)
Factor, it is calculated by dividing the rentable square footage by the usable
square footage.
Eminent Domain:
A power of the state, municipalities, and
private persons or corporations authorized to exercise functions of public
character to acquire private property for public use by condemnation, in return
for just compensation. See also “Condemnation”.
Encroachment:
The intrusion of a structure which extends,
without permission, over a property line, easement boundary or building setback
line.
Encumbrance:
Any right to, or interest in, real property
held by someone other than the owner, but which will not prevent the transfer of
fee title (i.e. a claim, lien, charge or liability attached to and binding real
property)..
Environmental Impact Statement:
Documents which are
required by federal and state laws to accompany proposals for major projects and
programs that will likely have an impact on the surrounding environment.
Equity:
The fair market value of an asset less any
outstanding indebtedness or other encumbrances.
Escalation Clause:
A clause in a lease which provides for
the rent to be increased to reflect changes in expenses paid by the landlord
such as real estate taxes, operating costs, etc. This may be accomplished by
several means such as fixed periodic increases, increases tied to the Consumer
Price Index or adjustments based on changes in expenses paid by the landlord in
relation to a dollar stop or base year reference.
Estoppel Certificate:
A signed statement certifying that
certain statements of fact are correct as of the date of the statement and can
be relied upon by a third party, including a prospective lender or purchaser. In
the context of a lease, a statement by a tenant identifying that the lease is in
effect and certifying that no rent has been prepaid and that there are no known
outstanding defaults by the landlord (except those specified).
Escrow Agreement:
A written agreement made between the
parties to a contract and an escrow agent. The escrow agreement sets forth the
basic obligations of the parties, describes the monies (or other things of
value) to be deposited in escrow, and instructs the escrow agent concerning the
disposition of the monies deposited.
Exclusive Agency Listing:
A written agreement between a
real estate broker and a property owner in which the owner promises to pay a fee
or commission to the broker if specified real property is leased during the
listing period. The broker need not be the procuring cause of the lease.
Expense Stop:
An agreed dollar amount of taxes and
operating expense (expressed for the building as a whole or on a square foot
basis) over which the tenant will pay its prorated share of increases. May be
applied to specific expenses (e.g., property taxes or insurance).
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Face Rental Rate:
The “asking” rental rate published by the
landlord.
Fair Market Value:
The sale price at which a property would
change hands between a willing buyer and willing seller, neither being under any
compulsion to buy or sell and both having reasonable knowledge of the relevant
facts. Also known as FMV.
Finance Charge:
The amount paid for the privilege deferring
payment of goods or services purchased, including any charges payable by the
purchaser as a condition of the loan.
First Generation Space:
Generally refers to new space that
is currently available for lease and has never before been occupied by a tenant.
See also "Second Generation Space.
First Mortgage:
The senior mortgage which, by reason of its
position, has priority over all junior encumbrances. The holder of the first or
senior mortgage has a priority right to payment in the event of default.
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.
First Refusal Right or Right Of First Refusal (Adjacent
Space):
A lease clause giving a tenant the first opportunity to lease additional
space that might become available in 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. This right is often restricted to
specific areas of the building such as adjacent suites or other suites on the
same floor.
Fixed Costs:
Costs, such as rent, which do not fluctuate in
proportion to the level of sales or production.
Flex Space:
A building providing its occupants the
flexibility of utilizing the space. Usually provides a configuration allowing a
flexible amount of office or showroom space in combination with manufacturing,
laboratory, warehouse distribution, etc. Typically also provides the flexibility
to relocate overhead doors. Generally constructed with little or no common
areas, load-bearing floors, loading dock facilities and high ceilings.
Floor Area Ratio (FAR):
The ratio of the gross square
footage of a building to the land on which it is situated. Calculated by
dividing the total square footage in the building by the square footage of land
area.
Force Majeure:
A force that cannot be controlled by the
parties to a contract and prevents said parties from complying with the
provisions of the contract. This includes acts of God such as a flood or a
hurricane or, acts of man such as a strike, fire or war.
Foreclosure:
A procedure by which the mortgagee (“lender”)
either takes title to or forces the sale of the mortgagor’s (“borrower”)
property in satisfaction of a debt. See also "Deed In Lieu Of Foreclosure".
Full Recourse:
A loan on which an endorser or guarantor is
liable in the event of default by the borrower.
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. See also "Pass Throughs".
Future Proposed Space:
Space in a proposed commercial
development which is not yet under construction or where no construction start
date has been set. Future Proposed projects include all those projects waiting
for a lead tenant, financing, zoning, approvals or any other event necessary to
begin construction. Also may refer to the future phases of a multi-phase project
not yet built.
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General Contractor:
The prime contractor who contracts for
the construction of an entire building or project, rather than just a portion of
the work. The general contractor hires subcontractors, (e.g., plumbing,
electrical, etc.), coordinates all work, and is responsible for payment to
subcontractors.
General Partner:
A member of a partnership who has
authority to bind the partnership. A general partner also shares in the profits
and losses of the partnership. See also “Limited Partnership”.
Graduated Lease:
A lease, generally long term in nature,
which provides that the rent will vary depending upon future contingencies, such
as a periodic appraisal, the tenant’s gross income or simply the passage of
time.
Grant:
To bestow or transfer an interest in real property
by deed or other instrument; either the fee or a lesser interest, such as an
easement.
Grantee:
One to whom a grant is made.
Grantor:
The person making the grant.
Gross Absorption:
A measure of the total square feet leased
over a specified period of time with no consideration given to space vacated in
the same geographic area during the same time period. See also “Net Absorption”.
Gross Building Area:
The total floor area of the building
measuring from the outer surface of exterior walls and windows and including all
vertical penetrations (e.g. elevator shafts, etc.) and basement space.
Gross Lease:
A lease in which the tenant pays a flat sum
for rent out of which the landlord must pay all expenses such as taxes,
insurance, maintenance, utilities, etc.
Ground Rent:
Rent paid to the owner for use of land,
normally on which to build a building. Generally, the arrangement is that of a
long-term lease (e.g. 99 years) with the lessor retaining title to the land.
Guarantor:
One who makes a guaranty. See also “Guaranty”.
Guaranty:
Agreement whereby the guarantor undertakes
collaterally to assure satisfaction of the debt of another or perform the
obligation of another if and when the debtor fails to do so. Differs from a
surety agreement in that there is a separate and distinct contract rather than a
joint undertaking with the principal. See also "Guarantor".
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Hard Cost:
The cost of actually constructing the
improvements (i.e. construction costs). See also “Soft Cost”.
Highest and Best Use:
The use of land or buildings which
will bring the greatest economic return over a given time which is physically
possible, appropriately supported, financially feasible.
High Rise:
In the Central Business District, this could
mean a building higher than 25 stories above ground level but in suburban
sub-markets, it generally refers to buildings higher than 7 or 8 stories.
Hold Over Tenant:
A tenant retaining possession of the
leased premises after the expiration of a lease.
HVAC:
The acronym for “Heating, Ventilating and
Air-Conditioning”.
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