Affiliates: Business concerns, organizations, or individuals that control each other or that are controlled by a third party. Control may include shared management or ownership; common use of facilities, equipment, and employees; or family interest. The calculation of a firm's size includes the employees or receipts of all affiliates. Affiliation with another business concern is based on the power to control, whether exercised or not. Such factors as common ownership, common management and identity of interest (often found in members of the same family), among others, are indicators of affiliation. Power to control exists when a party or parties have 50 percent or more ownership. It may also exist with considerably less than 50 percent ownership by contractual arrangement or when one or more parties own a large share compared to other parties. The affiliated business concerns need not be in the same line of business. Build-to-suit: A method of leasing property whereby the developer/landlord builds to a tenant's specifications. Buildable/Ploted acres: The area of land that is available to be built on after subtracting for roads, setbacks, anticipated open spaces and areas unsuitable for construction Base rent: A set amount used as a minimum rent with provisions for increasing the rent over the term of the lease. Clear title/Absolute title: A title that is free of liens or legal questions as to ownership of the property. Default: The general failure to perform a legal or contractual duty or to discharge an obligation when due. Demising wall: The partition wall that separates one tenant's space from another or from the building's common areas. Design/build: A system in which a single entity is responsible for both the design and construction. Due diligence: Activities carried out by a prospective purchaser or mortgager of real property to confirm that the property is as represented by the seller and is not subject to environmental or other problems. Face rental rate: The asking rental rate published by the landlord. Flat fee: A fee paid to an adviser or manager for managing a portfolio of real estate assets, typically stated as a flat percentage of gross asset value, net asset value or invested capital Floor area ratio (FAR): The ratio of the gross square footage of a building to the square footage of the land on which it is situated. Force majeure: A force that cannot be controlled by the parties to a contract and prevents them 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. Floor/Spaceplan: A graphic representation of a tenant's space requirements, showing wall and door locations, room sizes and sometimes furniture layouts Gross leasable area: The portion of total floor area designed for tenants' occupancy and exclusive use, including storage areas. It is the total area that produces rental income. Grantor: A person to whom a grant is made; the person named in a deed to receive title to property. High-rise: In the central business district, this could mean a building higher than 25 stories above ground level, but in suburban markets, it generally refers to buildings higher than seven or eight stories. Internal rate of return (IRR): A discounted cash-flow analysis calculation used to determine the potential total return of a real estate asset during an anticipated holding period Joint venture: An investment entity formed by one or more entities to acquire or develop and manage real property and/or other assets Lease commencement date: The date usually constitutes the commencement of the term of the lease, whether or not the tenant has actually taken possession, so long as beneficial occupancy is possible. Letter of intent(LOI): A preliminary agreement stating the proposed terms for a final contract. Multinational corporation: A multinational corporation (MNC) or transnational corporation (TNC) is one that spans multiple nations; these corporations are often very large. Such companies have offices and/or factories in different countries. They usually have a centralised head office where they coordinate global management. Very large multinationals have budgets that exceed those of many countries. They can be seen as a power in global politics. Multinationals often make use of subcontractors to produce certain goods for them. The first multinational appeared in 1602 and was the Dutch East India Company. Marketable/Clear title: A title free from encumbrances that could be readily marketed to a willing purchaser Mixed-use: Space within a building or project providing for more than one use Operating expense: The actual costs associated with operating a property, including maintenance, repairs, management, utilities, etc Out-parcel: Individual retail sites in a shopping center Power of attorney: A legal document that authorizes another person to act on one's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time. Speculation: The act of knowingly investing funds in a venture carrying higher-than-average risks in the hope of making above-average profits. Speculators expect to make a profit because of price changes. Speculator: An individual who accepts a higher than average risk in an aim to make a bigger profit from buying and selling financial instruments or commodities by anticipating future price movements. A subcontractor is hired by a general or prime contractor to perform a specific task as part of the overall project. The incentive to hire subcontractors is a cut in cost to the general contractor while receiving the same or better service than the general contractor could have provided by itself. Most subcontractors do work for the same companies rather than different ones. This allows subcontractors to further specialize their skills. Setback: The distance from a curb, property line or other reference point, within which building is prohibited Site plan: A detailed plan that depicts the location of improvements on a parcel Slab: The exposed wearing surface laid over the structural support beams of a building to form the floor(s) of the building Title search: A review of all recorded documents affecting a specific piece of property to determine the present condition of title Valuation: An estimated value or worth of something. Wire transfer: Electronic transfers of money (credits and debits), to checking accounts saved in computers. Zoning: In general, zoning is the division of an area into sub-areas, called zones. Zoning is a system of land use regulation which designates the permitted uses of land based on location. One purpose of zoning is to prevent new development from harming existing residents or businesse s. Zoning commonly includes regulation on the kinds of activities which will be acceptable on particular lots (such as open space, residential, agricultural, commercial or industrial), the densities at which those activities can be performed (low density housing such as single family homes to high density such as apartment buildings), the height of buildings, the amount of space structures may occupy by limiting how close a building may be from the edge of the lot, the proportions of the types of space on a lot (for example, how much landscaped space and how much paved space), and how much parking must be provided.Bungalow - A one-story house, cottage or cabin. Bungalows are generally small in terms of square footage, but it is not uncommon to see very large bungalows. Bungalows were originally designed to provide affordable, modern housing for the working class. 
Bungalow: A one-story house, cottage or cabin. Bungalows are generally small in terms of square footage, but it is not uncommon to see very large bungalows. Bungalows were originally designed to provide affordable, modern housing for the working class. Buyer's market: A condition of the market in which there is an abundance of properties available and hence buyers can afford to be selective and may be able to buy at less than the price that previously prevailed. See Seller's Market.
Breach : Violation of an obligation in a contract
Condominium: A type of ownership in real property where all of the owners own the property, common areas and buildings together, with the exception of the interior of the unit to which they have title. Often mistakenly referred to as a type of construction or development, it actually refers to the type of ownership.
Mortgages are also known as liens against property, or claims on property. Capital asset: Tangible property, including durable goods, equipment, buildings, installations, and land. Capital gain: The income received from selling an asset such as property or stocks, for a profit. Certified copy: Copies of original legal documents that contain a raised or impressed seal plus statements about the accuracy and authenticity of the documents. Certificate of occupancy: A document presented by a local government agency or building department certifying that a building and/or the leased area has been satisfactorily inspected and is in a condition suitable for occupancy Common area: For lease purposes, the areas of a building and its site that are available for the non-exclusive use of all its tenants, e.g., lobbies, corridors, elevators etc. Common area maintenance: Rent charged to the tenant in addition to the base rent to maintain the common areas. Examples include , outdoor lighting, parking lot sweeping, etc. Construction management: The act of ensuring the various stages of the construction process are completed in a timely and seamless fashion.
Delivery: Transfer something from one entity to another.
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. Escalation clause: A clause in a lease that provides for the rent to be increased. Ejectment: Action to regain possession or real property. This is a last-ditch effort that is used when there is no relationship between landlord and tenant Economic rent: The market rental value of a property at a given point in time Economic feasibility: The feasibility of a building or project in terms of costs and revenue, with excess revenue establishing the degree of viability Earnest money: The monetary advance of part of the purchase price to indicate the intention and ability of the buyer to carry out the contract. Earnest money is forfeited by the donor if he or she fails to carry out the terms of the contract or agreement. Eviction (Actual): Physical removal of a tenant either by law or force. Eviction: The lawful expulsion of an occupant from real property. Enforceable: That which can be made to effective; to cause to take effect. An agreement or contract between persons in which one or other party can legally compel the performance of another or other parties. Execute: To complete, to make, to perform, to do, to follow out. To execute a deed is to make a deed Execution of Contract - To sign a contract HVAC: Heating, ventilation and air-conditioning. Inflation: The annual rate at which consumer prices increase
Liquidate: Disposal of property or settlement of debts. Liquidity: The ability of property to be exchanged for cash. Legal Description: A written description by which property can be located definitely by reference to government surveys or approved recorded maps. Lessor: The party to a lease agreement who has legal or tax title to the property, who grants the lessee/tenant the right to use the property for the lease term, and who is entitled to the rental fees. Lessee/Tenant : One who rents real estate from another and holds an estate by virtue of a lease Landlord: A landlord is the owner of a house, apartment, condominium, or land which is rented or leased to an individual or business, who is called the tenant.. A female landlord can either be called a landlady or simply landlord. When a legal person is in the same position the term landlord is used. Long term: Period usually greater than one year. 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.Shell space :The interior condition of either a new or existing building without improvements or finishes. Typically denotes floor, windows, walls and roof of an enclosed premises. May include some electrical or plumbing improvements, but not demising walls Notary public: A public figure authorized to attest to the signing of documents, such as deeds or mortgages. The notary public certifies that he or she has witnessed the signing of the document by also signing the document and affixing his or her official seal. NASDAQ: The world's first and largest electronic stock market in the world that was started in 1971. It is an automated computerized information system that facilitates trading and provides brokers, dealers and others price quotations on securities traded over the counter. Ownership: The state of holding a lawful claim or title to property Prime tenant: The major tenant in a building, or the major or anchor tenant in a shopping center Plat: Map of a specific area, such as a subdivision, that shows the boundaries of individual lots together with streets and easements Percentage rent: Rent payable under a lease that is equal to a percentage of gross sales or gross revenues received by the tenant. It is commonly used in retail center leases. Parking ratio: Dividing the total rentable square footage of a building by the building's total number of parking spaces provides the amount of rentable square feet per each individual parking space. Property tax: Property tax is an ad valorem tax that an owner of real estate or other property pays on the value of the thing taxed. The taxing authority performs or requires an appraisal of the value of the property, and tax is assessed in proportion to that value. Forms of property tax used vary between countries and jurisdictions. Pro rata: Latin, meaning "according to the rate." Pro rata refers to dividing something (costs, income, profits, assessments, proceeds from a liquidation, etc.) among participants according to a rate in which each participant's share is in proportion to the part of the whole owned or claimed by the participant. In the case of a tenant, the proportionate share of expenses for the maintenance and operation of the property Prima facie: At first view; that which appears to be true and is accepted as being true as long as contrary evidence is not detected. Penalty clause: a provision in a written contract/ agreement specifying a penalty for late payments. Prime space: Typically refers to first-generation space that is available for lease Rentable/usable ratio: A building's total rentable area divided by its usable area. It represents the tenant's pro-rata share of the building's common areas and can determine the square footage upon which the tenant will pay rent. The inverse describes the proportion of space that an occupant can expect to actually use. Rent commencement date: The date on which a tenant begins paying rent Renewal option: A clause giving a tenant the right to extend the term of a lease. Raw space: Unimproved shell space in a building Raw land: Unimproved land that remains in its natural state Return on investment (ROI): Used to measure the efficiency with which financial resources available to a company are employed by management. Calculated: Return on Investment (ROI) = Annual profit / Average amount Invested Remittance: Funds transferred from one party to another as payment for purchased goods or services. Survey: The process by which a parcel is measured and its boundaries and contents ascertained Sub lessee: A person or identity to whom the rights of use and occupancy under a lease have been conveyed, while the original lessee retains primary responsibility for the obligations of the lease. Short term: Period usually one year or less. Single /sole owner: The person designated on the face of the bond as the only person entitled to redeem the bond during his or her lifetime. Also referred to as sole owner. If you own a bond all by yourself, without sharing it with anyone, you're the single owner. Transaction: The entry or liquidation of a trade. Trading: Buying and selling of properties, with the expectation of making a substantial profit in a short time frame. Tangible asset: An investment asset that can be seen and touched. For example precious metals, coins, gemstones, buildings, stamps, antiques and artwork are considered to be tangible assets. Turn key project: The construction of a project in which a third party is responsible for the total completion of a building, or for the construction of tenant improvements to the customized requirements and specifications of a future owner or tenant Total retail area: Total floor area of a retail center less common areas. It is the area from which sales are generated and includes any department stores or other areas (such as banks, restaurants or service stations) not owned by the center. Title: A legal document evidencing a person's right to or ownership of a property. Unencumbered: Property that is free of liens and other encumbrances Usable/carpet square footage: The area contained within the demising walls of the tenant space that equals the net square footage multiplied by the circulation factor Venture capital: Money used to support new or unusual commercial undertakings; equity, risk or speculative capital. This funding is provided to new or existing firms that exhibit above-average growth rates, a significant potential for market expansion and the need for additional financing for business maintenance or expansion.
Real Estate Terminologies
Thu, 10/04/2008 - 12:40
Anchor: The tenant that serves as the predominant draw to a commercial property, usually the largest tenant in a shopping center
Appreciation: An increase in the value or price of an asset
As-is condition: The acceptance by the tenant of the existing condition of the premises at the time a lease is consummated, including any physical defects
Attorn: To agree to recognize a new owner of a property and to pay him/her rent.
Average free rent: Expressed in months, the rent abatement concession expected to be granted to a tenant as part of a lease incentive under current market conditions
Asset: Terms of value owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets." These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others.
Agreement of Sale: A written contract between seller and buyer in which they reach a meeting of minds on the terms and conditions of the sale.
Assignee: The person or institution to whom an agreement, contract, or interest in real property is transferred.
Assignor: A person or institution from whom an agreement, contract or property is transferred to another.
Benefactor: A benefactor is a person or other entity providing money or other benefits to another; the person receiving them is called a beneficiary
Beneficiary: (Insurance) The person or organization named in a policy that will receive the life insurance or other benefit payments in the event of an insurer's death.
Convenants : Agreements written into deeds and other instruments promising performance or non-performance of certain acts or stipulating certain uses or non-uses of the property.
Capital Improvement: The addition of a permanent structural improvement or the restoration of some aspect of a property that will either enhance the property's overall value or increases its useful life. Although the scale of the capital improvement can vary, capital improvements can be made by both individual homeowners and large-scale property owners. Mortgages :A debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Mortgages are used by individuals and businesses wishing to make large value purchases of real estate without paying the entire value of the purchase up front.
Capital expenditures: Money spent by a company to add or expand property, plant, and equipment assets, with the expectation that they will benefit the company over a long period of time
Encroachment: An improvement that intrudes illegally on another's property.
Encumbrance: A right to, or interest in, real property held by someone other than the owner that does not prevent the transfer of fee title
Franchise: The authorization to conduct a business using the name and operating methods of another. In lending on an income property, a franchise may have value as an additional security, and may be assigned to the lender.
Franchisee: Affiliated dealers for distribution of products, services or methods in franchising obtained by franchiser.
Franchiser: The business entity which provides the franchisee the right and license to sell a product or service and possibly to use the business system developed by the company.
Grantee: A person to whom a grant is made; the person named in a deed to receive title to property.
Goodwill: An intangible asset of a business that relates to a favorable relationship with customers, and excess earning power. Favorable factors such as location, product superiority, service reputation, and quality personnel often generate goodwill.
GDP: The total market value of all goods and services that are produced within a country, during a given period (usually one year).
Lease: A written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time.
Real Estate Syndicate: When partners (either with or without unlimited liability) form a partnership to participate in a real estate venture
Square Feet: The usual method by which rental space is defined. It is the area of that space, calculated by taking length times width. For example, a room 30 feet by 60 feet has an area of 1,800 square feet.
Seller's market: A condition of the market in which there is a scarcity of properties available and hence sellers can obtain better conditions of sale or higher prices. See Buyer's Market.
Speculative Bubble: A rapid run-up in prices caused by excessive buying that is unrelated to any of the basic, underlying factors affecting the supply or demand for a commodity or other asset. Speculative bubbles are usually associated with a "bandwagon" effect in which speculators rush to buy the commodity (in the case of futures, "to take positions") before the price trend ends, and an even greater rush to sell the commodity (unwind positions) when prices reverse
Subcontractor: A subcontractor is an individual or in many cases a business that signs a contract to perform part or all of the obligations of another's contract.
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