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Common Commercial Real Estate Terms

Posted by Diana Podaski on Wed, Feb 22, 2017 @ 13:02 PM

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There are many shopping center and commercial real estate terms and acronyms to be aware of but here is a common list to get you started. The list is broken up by 5 main departments in the industry/Commercial Real Estate: Leasing, Development, Construction, Marketing and Operations.

LEASING

  • Triple Net Lease - A lease in which 100% of all taxes, insurance, and maintenance associated with a shopping center is paid by the tenant
  • Co-tenancy - A term that refers to a clause inserted into a tenant's lease stipulating that a reduced rent or no rent be paid until an agreed-upon percentage of the center is occupied
  • LOI - Letter of Intent: A document submitted prior to a formal lease serving to delineate the intentions between the landlord and the tenant
  • Mom-and-Pop Store - A store whose owners own only that single store

DEVELOPMENT

  • Mixed-use Center - Centers typically combining three or more revenue-producing uses such as retail, office, parking, restaurants, hotel, residential, and entertainment
  • Pad - The exact parcel of land on which a store's building stands
  • Parking Ratio - The relationship of space used for parking and necessary vehicular and pedestrian movement to land area covered by buildings or space within the buildings. This is usually expressed in the number of car spaces per 1,000 sf of rentable area
  • Critical Mass - Refers to the high number of retailers and square-footage needed in one center or in one market to create enough excitement to attract a high volume of shoppers

CONSTRUCTION

  • Vanilla Box - A space partially completed by the landlord based on negotiations between the tenant and landlord. Typically this means HVAC, walls, floors, stockroom, basic electric and plumbing, rear door and storefront
  • LOD -  Lease Outline Drawing: Material prepared for the tenant, showing the demised space and its relation to adjacent spaces and the center as a whole; electrical, plumbing, HVAC, and waste line entry points are identified, but existing partitions and fixtures are usually not shown.
  • Replacement Cost - Today's cost of construction, without considering depreciation
  • COI or Certificate of Occupancy - A document issued by a local government to a developer permitting the structure to be occupied by members of the public. Issuance of the certificate generally indicates that the building is in compliance with public health and building codes

MARKETING

  • ROI - Return on investment
  • Line Art - Illustrative material other than photographs
  • Fact Sheet - Material used to present essential facts about a space for lease, property of shopping center most often in a non-narrative outline
  • SEO - Search Engine Optimization: Improving the visibility of a website or web page in search engines like Google organically (un-paid)

OPERATIONS

  • CAM - Common Area Maintenance - The amount of money charged to tenants for their shares of maintaining a center's common area. Some items include electric, security and maintenance of the parking lots
  • HVAC - Heating, Ventilation, and Air-Conditioning
  • Emergency Book - A pamphlet given to new tenants that gives important phone numbers and outlines procedures for various emergencies
  • Irregularity Reports - Written documentation of irregular or unusual conditions noted by security officers

 

Topics: Leasing Resources