Commercial real estate glossary for tenant rep brokerage teams

Welcome to the tenant rep broker's CRE glossary, a comprehensive guide to navigating the world of commercial real estate as a brokerage team. Whether you're a seasoned broker or new to the industry, this glossary of CRE terms provides essential definitions and insights to help you understand the terminology used in the field.

From building descriptions to lease negotiations, our glossary covers key concepts and terms relevant to tenant representatives and professionals across the commercial real estate sector.

LeaseUp’s CRE glossary is also a useful resource to send to clients/tenants who might be unfamiliar with the terminology used in the typical CRE deal flow.

Table of contents‍‍

General commercial real estate terms
- Availability
- Brokerage
- Building
- Commercial real estate (CRE)
- Landlord representation
- Tenant representation

‍CRE deal process
- Broker / Tenant rep broker
- Brochure
- Client deliverables
- Deal flow
- Flyer
- Landlord
- Lease / Lease agreement
- Lease administration
- Lease audit‍
- Lease guaranty
- Lease negotiation
- Lease renewal
- Lease restructuring
- Lease term
- Leaseback
- Lease-up
- Leasing activity
- Letter of intent (LOI)
- Property manager
- Renewal option
- Site selection
- Sublease
- Survey / Market survey
- Tenant
- Tour book

Financial terms
- Appraisal
- Asking rent
- Capital expenses (Cap ex)
- Capitalization rate (Cap rate)
- Full-service (FS) rental rate
- Gross rental income
- Modified gross (MG) rental rate
- Net operating income (NOI)
- Occupancy cost
- Price per square foot (Price / Sqft)
- Triple-net (NNN) rental rate

Market factors
- Absorption rate
- Comparable sales
- Leased space
- Net absorption
- Occupied space
- Vacancy factor
- Vacancy rate
- Vacant space

Building/space information
- Air rights
- Amenities
- Building size
- Ceiling height
- Class A building
- Class B building
- Class C building
- Co-tenancy
- Common area
- Date available
- Floors
- LEED® certification
- Parking ratio
- Preleased space
- Rentable building area
- Rentable square feet (RSF)
- Shadow space / Phantom space
- Square feet (SF) available
- Sublet space
- Total inventory
- Usable area
- Walk score
- Year built
- Year renovated

Location/development
- Building permits
- Build-out
- Central building district (CBD)
- Certificate of occupancy (CO)
- Entitlements
- Exurban
- Suburban
- Urban
- Work letter
- Zoning

Technology terms
- CRE deal platform
- Commercial real estate software
- Deal data
- Proptech
- Tenant representation software

General commercial real estate terms

Availability
The current status of a property or space in terms of its readiness for occupancy or lease. Availability in commercial real estate describes whether a space is vacant and ready for immediate occupancy, under lease negotiation, or undergoing renovations or preparations for future occupancy. Availability often includes details such as the square footage, layout, amenities, lease terms, and any other relevant factors affecting the potential occupancy of the space. It is a crucial metric used by tenants, landlords, brokers, and property managers to assess the market and make informed decisions regarding leasing or purchasing commercial properties.

Brokerage
The professional service provided by licensed individuals or firms who act as intermediaries between parties involved in commercial property transactions. These transactions typically involve the buying, selling, leasing, or managing of commercial real estate properties such as office buildings, retail spaces, and industrial facilities. Brokerage services may include market research, property valuation, marketing and advertising, negotiation, lease administration, and transaction management. Commercial real estate brokerages employ brokers who specialize in specific property types or market segments and may represent either landlords (landlord representation) or tenants (tenant representation) in lease transactions, as well as buyers and sellers in sales transactions. Brokerage firms play a critical role in facilitating transactions, providing market insights, and helping clients achieve their real estate objectives.

Building
A physical structure or edifice that is constructed or adapted for occupancy, typically for commercial or business purposes. Commercial buildings encompass a wide range of property types, including office buildings, retail stores, industrial warehouses, medical facilities, hotels, and mixed-use developments. Buildings vary in size, design, layout, and amenities, catering to different business needs and requirements. They may be single-tenant or multi-tenant, owner-occupied or leased, and can be classified into different categories based on factors such as age, quality, location, and functionality (e.g., Class A, Class B, or Class C buildings). Commercial buildings serve as the primary space for conducting business activities, providing workspace, retail space, storage, manufacturing facilities, or accommodation services to tenants or occupants. Ownership and management of commercial buildings may involve various stakeholders, including landlords, property managers, developers, investors, and tenants, each with distinct roles and responsibilities in the operation, maintenance, and utilization of the property.

Commercial real estate (CRE)
‍Commercial real estate refers to property used for business or income-generating purposes, rather than for residential living. CRE encompasses a broad spectrum of property types, including office buildings, retail spaces, industrial facilities, hotels, and mixed-use developments. Unlike residential real estate, which is primarily used for housing, commercial properties are designed to generate revenue through leasing or rental income, capital appreciation, or business operations. The commercial real estate market is characterized by transactions involving the buying, selling, leasing, and development of commercial properties, with participants such as investors, developers, landlords, tenants, brokers, lenders, and property managers. The value of commercial real estate is influenced by factors such as location, demand and supply dynamics, economic conditions, market trends, zoning regulations, and property characteristics. Commercial real estate plays a vital role in supporting businesses, industries, and economic activities, providing space for offices, retail stores, manufacturing operations, warehousing, logistics, hospitality services, and other commercial ventures. The CRE sector encompasses various submarkets, each with its own unique property types, investment opportunities, and market dynamics, contributing to the overall vitality and growth of the economy.

Landlord representation
‍Landlord representation, also known as landlord agency or landlord leasing, refers to a specialized service provided by commercial real estate brokers or firms that represent property owners (landlords) in leasing their commercial properties. Landlord representatives act as intermediaries between property owners and prospective tenants, assisting landlords in marketing their properties, negotiating lease agreements, and maximizing the value of their real estate assets. The primary objective of landlord representation is to secure suitable tenants for vacant or available space within a landlord's property portfolio while achieving optimal lease terms and rental income for the landlord. Landlord representatives collaborate closely with property owners to develop comprehensive leasing strategies tailored to the specific objectives and market conditions of each property. This may involve conducting market research and analysis, preparing marketing materials such as property listings, flyers, and brochures, implementing targeted advertising and promotional campaigns, and facilitating property tours and tenant showings. Throughout the leasing process, landlord representatives engage in negotiations with prospective tenants on behalf of the landlord, addressing key terms such as lease duration, rental rates, tenant improvements, lease incentives, and other provisions.

‍Tenant representation
Tenant representation, also known as tenant agency or tenant advisory services, refers to a specialized service provided by commercial real estate brokers or firms that represent tenants in leasing or acquiring commercial properties. Tenant representatives act as advocates for tenants, helping them navigate the complexities of the real estate market, identify suitable properties, and negotiate favorable lease or purchase terms. The primary objective of tenant representation is to protect the interests of tenants and ensure they secure the most suitable space for their business needs while obtaining the best possible lease or purchase terms. Tenant representatives work closely with tenants to understand their unique requirements, including location preferences, space requirements, budget constraints, and desired lease terms. Based on these criteria, tenant representatives conduct comprehensive market research and analysis to identify potential properties that meet the tenant's needs. They assist tenants throughout the property search process, providing guidance on property selection, conducting property tours, and evaluating lease proposals or purchase offers. Tenant representatives leverage their knowledge of local market conditions, industry trends, and landlord practices to negotiate favorable lease or purchase agreements on behalf of tenants. This includes negotiating key terms such as lease duration, rental rates, tenant improvement allowances, lease incentives, renewal options, and other lease provisions. Throughout the transaction, tenant representatives serve as trusted advisors to tenants, offering expert guidance and strategic insights to help them make informed real estate decisions that align with their business objectives. Tenant representation services are typically provided at no cost to tenants, as the broker's compensation is typically paid by the property owner or landlord.

CRE deal process

Broker
A broker plays a pivotal role as an intermediary between parties involved in property transactions. Brokers represent either the buyer or seller (landlord or tenant) and facilitate the negotiation and completion of real estate deals. They are licensed professionals with expertise in the local market, property valuation, negotiation tactics, and legal aspects of real estate transactions. Brokers act on behalf of their clients to identify suitable properties, market listings, conduct property showings, negotiate terms and conditions, and oversee the closing process. They provide valuable insights, guidance, and assistance throughout the transaction to ensure the best possible outcome for their clients. Brokers may specialize in specific sectors of CRE, such as office, retail, or industrial properties, allowing them to offer specialized expertise tailored to their clients' needs.

‍Brochure
A printed or digital promotional material used by real estate professionals, such as brokers or property owners, to showcase a commercial property or development project to potential tenants, buyers, or investors. Brochures are designed to provide detailed information about the property's features, amenities, location, and leasing or sale opportunities in a visually appealing format. They typically include high-quality photographs, floor plans, site maps, and descriptive text highlighting key selling points of the property, such as its architectural design, available space, parking facilities, accessibility, and proximity to amenities or transportation hubs. Brochures may also contain information about the property owner or landlord, leasing terms, rental rates, tenant improvement allowances, and contact details for the listing agent or brokerage firm handling the property. Brochures serve as important marketing collateral in the commercial real estate industry, helping to attract prospective tenants or buyers, generate interest in the property, and facilitate property tours or inquiries. They are often distributed through various channels, including direct mail, email campaigns, property listing websites, social media platforms, industry events, and in-person meetings with potential clients. A well-designed and informative brochure can effectively communicate the value proposition of a commercial property and differentiate it from competitors in the market, ultimately contributing to the successful leasing or sale of the property.

Client deliverables
The tangible outputs or documents that tenant representation brokers provide to their clients, typically tenants, as part of their service offerings during the leasing process. These deliverables are designed to inform and guide clients through various stages of the leasing transaction, from initial property search to lease execution, and may include a range of customized reports, analyses, presentations, and legal documents tailored to meet the specific needs and requirements of the client. Client deliverables play a crucial role in facilitating communication, transparency, and collaboration between tenant representation brokers and their clients throughout the leasing process, helping clients make informed decisions.

Deal flow
The consistent and ongoing pipeline of potential leasing or investment opportunities that a brokerage firm, investor, or real estate professional actively assesses and pursues. It encapsulates the entire process, from initial identification to final execution, of evaluating and engaging with opportunities such as property leases, acquisitions, and sales. Effective management of deal flow involves systematically analyzing market trends, conducting due diligence on prospective properties, negotiating terms, and ultimately closing transactions. A robust deal flow is essential for sustaining business growth, fostering client relationships, and capitalizing on market opportunities.

‍Flyer
In the context of commercial real estate, a flyer is a concise marketing document or advertisement designed to promote a property that is available for lease or sale. Typically distributed in both digital and print formats, flyers provide essential information about the property, including its location, size, features, amenities, and leasing or sale terms. They often include photographs, floor plans, and contact details for the listing broker or agent. Flyers serve as a key tool for attracting potential tenants or buyers and generating interest in the property within the target market.

Landlord
The owner or lessor of a property who leases or rents space to tenants in exchange for rental payments. Landlords may be individuals, corporations, real estate investment trusts (REITs), or other entities that own and manage commercial properties such as office buildings, retail centers, or industrial warehouses complexes. Responsibilities of landlords typically include property maintenance, repairs, tenant relations, lease negotiations, rent collection, and ensuring compliance with lease terms and regulations. They play a central role in the leasing process and are accountable for maintaining the property's value and profitability.

Lease / Lease agreement
A lease agreement (or lease) is a legally binding contract between a landlord (lessor) and a tenant (lessee) that outlines the terms and conditions governing the rental of a commercial property. This document sets forth the rights, obligations, and responsibilities of both parties throughout the duration of the lease term. Key provisions typically included in a lease agreement encompass details such as the lease duration, rental rate, payment terms, security deposit requirements, permitted uses of the space, maintenance responsibilities, property access, renewal options, and dispute resolution mechanisms. Additionally, the lease agreement may address specific terms related to tenant improvements, utilities, insurance requirements, property taxes, and any other relevant aspects of the leasing arrangement. The lease agreement serves to protect the interests of both the landlord and the tenant by establishing clear expectations and guidelines for their relationship during the occupancy period. It is essential for both parties to carefully review and negotiate the terms of the lease agreement before signing to ensure that their respective rights and obligations are adequately addressed and understood.

Lease administration
The management and oversight of lease agreements for commercial real estate properties. It involves the systematic handling of lease-related activities throughout the lease lifecycle, from initial negotiation to lease expiration or renewal. Lease administrators, often within property management teams or third-party firms, are responsible for ensuring compliance with lease terms, tracking critical dates, managing lease documentation, processing rent payments, and addressing tenant inquiries and requests. They play a vital role in maintaining accurate lease records, facilitating communication between landlords and tenants, and optimizing the efficiency and profitability of leased properties.

Lease audit
A lease audit is a thorough examination and verification of lease agreements and related financial documents to ensure compliance with lease terms and accuracy in billing and payment processes. Typically conducted by lease auditors or specialized firms, lease audits aim to identify any discrepancies, errors, or potential overcharges in rent, operating expenses, common area maintenance (CAM) charges, or other lease-related expenses. Lease audits help landlords and tenants ensure that financial obligations outlined in the lease are being met correctly and fairly. They may involve reviewing lease documents, financial records, invoices, and other relevant documentation to validate charges, reconcile payments, and resolve any discrepancies in a transparent and equitable manner.

Lease guaranty
A lease guaranty is a legal agreement in commercial real estate where a third party, typically an individual or entity, commits to fulfilling the tenant's lease obligations if the tenant defaults. This guaranty provides additional assurance to the landlord that rent payments and other lease responsibilities will be met, thereby reducing the financial risk associated with leasing the property. The guarantor’s creditworthiness is often scrutinized to ensure they can cover the lease obligations if necessary.

Lease negotiation
The process of discussing and reaching mutually acceptable terms and conditions between a landlord and a tenant regarding the leasing of commercial real estate space. This process involves various aspects, including rental rates, lease duration, tenant improvements, renewal options, and other lease provisions. Both parties engage in negotiations to achieve favorable terms that align with their respective interests and objectives. Effective lease negotiation requires clear communication, understanding of market conditions, knowledge of lease terminology, and sometimes the involvement of real estate brokers or legal advisors. The goal of lease negotiation is to create a legally binding agreement that reflects the needs and expectations of both the landlord and the tenant while fostering a positive and productive landlord-tenant relationship throughout the lease term.

Lease renewal
The process by which a tenant extends their existing lease agreement for the same commercial real estate space upon its expiration. Typically, lease renewals occur when the initial lease term is about to end, and both the landlord and the tenant decide to continue the tenancy. During a lease renewal, negotiations may take place to discuss potential changes to the terms of the lease, such as rental rates, lease duration, tenant improvements, and any other lease provisions. Landlords may offer incentives to encourage tenants to renew their leases, such as rent concessions, upgrades to the space, or improvements to the property. Conversely, tenants may seek favorable terms or improvements to the premises as part of the renewal process. Lease renewals are important for maintaining occupancy levels within a commercial property and for ensuring ongoing revenue streams for landlords. Successful lease renewals contribute to the stability and long-term viability of both landlords and tenants in the commercial real estate market.

Lease restructuring
Lease restructuring involves renegotiating the terms of an existing lease agreement between a landlord and a tenant. This process often occurs when either party faces changing circumstances that necessitate adjustments to the lease terms. Lease restructuring may involve modifying various aspects of the lease, such as rental rates, lease duration, tenant improvements, or other contractual provisions. It can be initiated by either the landlord or the tenant, depending on their respective needs and objectives. Common reasons for lease restructuring include changes in market conditions, shifts in business operations, financial challenges, or the need to accommodate expansions or contractions of leased space. The goal of lease restructuring is to arrive at mutually beneficial terms that address the evolving needs and concerns of both parties while ensuring the continued occupancy of the commercial space. Effective lease restructuring requires open communication, negotiation, and careful consideration of the interests and objectives of both the landlord and the tenant.

Lease term
The duration for which a commercial property is rented out by the landlord to the tenant, as stipulated in the lease agreement. The lease term specifies the period during which the tenant has the right to occupy and utilize the leased space, while also outlining the timeframe within which the landlord is obligated to provide the premises in accordance with the terms of the lease. The lease term typically encompasses a specific number of years or months, although it can vary based on the mutual agreement between the parties. During the lease term, the tenant is typically obligated to pay rent and adhere to the terms and conditions outlined in the lease agreement. Additionally, the lease term may include provisions related to rent escalations, renewal options, termination clauses, and other relevant terms that govern the landlord-tenant relationship throughout the occupancy period. The lease term is a critical component of the lease agreement, as it provides clarity and certainty regarding the duration of the tenancy for both parties involved. It is important for landlords and tenants to carefully consider and negotiate the lease term to ensure that it aligns with their respective needs and objectives. Additionally, lease terms may vary depending on factors such as market conditions, property type, tenant requirements, and landlord preferences.

Leaseback
A leaseback arrangement involves a property owner selling their property and then immediately leasing it back from the buyer. This allows the seller to access capital tied up in the property while maintaining occupancy and operational control. Leaseback agreements often benefit both parties by providing the seller with liquidity and the buyer with a stable income stream from the lease payments. These arrangements can vary in structure and terms depending on the specific needs and objectives of the parties involved.

Lease-up
The crucial phase during which a property, such as a newly constructed building or a recently renovated space, transitions from being vacant to fully occupied by tenants. This process encompasses various activities, including marketing the property to potential tenants, conducting property tours, negotiating lease terms, and finalizing lease agreements. Effective lease-up strategies are essential for maximizing the property's income potential and achieving optimal occupancy levels. It often involves collaboration between landlords, property managers, leasing agents, and tenant representatives to attract suitable tenants and establish mutually beneficial lease arrangements. Additionally, lease-up may involve implementing promotional campaigns, offering incentives, and addressing any tenant concerns to expedite the occupancy of available spaces and enhance the property's overall value.

Leasing activity
The process of securing tenants for commercial real estate properties. Leasing activity encompasses all actions taken by landlords, property managers, and brokers to market available space, attract potential tenants, negotiate lease terms, and ultimately execute lease agreements. Leasing activity includes tasks such as property showings, responding to inquiries, preparing lease documents, conducting negotiations, and finalizing deals. This metric is often tracked to gauge the health and performance of the commercial real estate market in a particular area or sector.

Letter of intent (LOI)
A Letter of intent (LOI) in commercial real estate is a preliminary agreement outlining the key terms and conditions of a potential lease or purchase transaction. It is a non-binding document that serves as a roadmap for negotiations between the parties involved, typically the prospective tenant or buyer and the property owner or landlord. The LOI typically includes essential elements such as the proposed lease or purchase price, lease terms (e.g., duration, renewal options), any tenant improvements or concessions, and other important provisions. While the LOI is not legally binding, it serves as a foundation for drafting the final lease or purchase agreement and helps ensure that both parties are aligned on the fundamental terms before proceeding with more detailed negotiations.

‍Property manager
An individual or company responsible for the day-to-day operations and oversight of a property on behalf of the owner or landlord. Their primary role involves ensuring that the property is well-maintained, financially sound, and compliant with relevant regulations. Property managers handle various tasks, including rent collection, lease enforcement, maintenance and repairs, tenant communication, budgeting, and financial reporting. They act as a liaison between the landlord and tenants, addressing issues, resolving disputes, and striving to enhance the overall value and performance of the property. Property managers play a crucial role in maximizing the return on investment for property owners while providing quality service to tenants.

‍Renewal option
A contractual clause that grants the tenant the right to extend the lease agreement for an additional period beyond its initial term. This option allows the tenant to choose whether to remain in the leased space for an agreed-upon duration once the initial lease term expires, without the need for renegotiation or competition with other potential tenants. Typically, the terms and conditions for exercising the renewal option, including the length of the renewal term and any changes in rent, are outlined in the original lease agreement. Renewal options provide tenants with flexibility and stability, allowing them to plan for the future and maintain continuity in their business operations.

‍Site selection
Site selection is the process undertaken by tenant representative brokers to identify and evaluate potential locations for their clients' business operations. This process entails thorough research, analysis, and consideration of various factors such as size, location, accessibility, zoning regulations, demographic trends, competition, and proximity to suppliers, customers, and workforce pools. Collaborating closely with clients, brokers compile a tour book containing detailed information and analysis of each property, allowing clients to visually compare and evaluate different options and make informed choices. Tenant representatives leverage their expertise, market knowledge, and negotiation skills to guide clients in selecting sites that best meet their business objectives and ensure favorable lease terms. The goal of site selection is to identify optimal locations that support the client's business growth, profitability, and long-term success.

Sublease
A sublease occurs when a tenant rents out all or a portion of their leased space to another party, known as the subtenant or sublessee, while still holding the primary lease with the landlord. The primary tenant essentially becomes a landlord to the subtenant, managing the subleased space and assuming responsibility for rent payments, maintenance, and adherence to lease terms. Subleasing typically arises when a tenant has excess space or needs to vacate the premises before the lease term expires. Sublease agreements are subject to the terms outlined in the original lease between the tenant and landlord, and often require landlord approval. Subleasing provides flexibility for tenants to offset costs or obligations, but it also involves complexities related to legal and financial considerations, such as liability and consent requirements.

‍Survey / Market survey
A comprehensive compilation and assessment of potential property options presented by tenant representative brokers to their clients, typically tenants seeking suitable spaces for their business operations. This survey entails a detailed evaluation of various properties based on specific criteria outlined by the client, such as location, size, layout, amenities, accessibility, and lease terms. Tenant rep brokers meticulously research and analyze available properties, gathering pertinent information to create a curated list of options tailored to the client's requirements and preferences. The survey serves as a vital tool in the decision-making process, providing clients with a comprehensive overview of available properties and facilitating informed choices regarding potential lease agreements. By presenting a well-organized survey, brokers enable clients to effectively compare different options and make strategic decisions aligned with their business objectives and growth plans.

‍Tenant
An individual or entity that occupies or leases space within a property owned by a landlord or property owner. Tenants may include businesses, organizations, or individuals renting space for various purposes, such as office space, retail stores, industrial facilities, or residential units. As occupants of leased premises, tenants typically enter into lease agreements with landlords outlining the terms and conditions of their occupancy, including rental rates, lease duration, maintenance responsibilities, and other lease provisions. Tenants are responsible for paying rent and adhering to the terms of the lease agreement throughout the duration of their tenancy. They may also have rights and obligations regarding the use of the leased space, property maintenance, alterations or improvements, and compliance with building regulations or lease covenants. The relationship between tenants and landlords is governed by the terms of the lease agreement, as well as applicable laws and regulations governing landlord-tenant relationships in the jurisdiction where the property is located.

‍Tour book
A curated portfolio or booklet compiled by tenant rep brokers to showcase various property options to their clients, typically tenants seeking suitable spaces for their business operations. The tour book is a comprehensive guide that includes detailed information and visuals of available properties, presenting essential details such as location, size, layout, amenities, accessibility, lease terms, and any other pertinent factors relevant to the client's requirements and preferences. Tenant representatives meticulously select and organize property listings within the tour book, ensuring that each option aligns with the client's specific needs and objectives. The tour book is designed to provide clients with a structured and informative overview of potential spaces, facilitating efficient and productive property tours. By presenting a professionally curated tour book, brokers enable clients to explore and evaluate different properties in a systematic manner, ultimately aiding in the decision-making process and guiding clients toward the most suitable leasing opportunities.

Financial terms

Appraisal
A professional evaluation of a property's value, conducted by a licensed appraiser. Appraisals are critical for determining the fair market value of a property, which is essential for various purposes, including financing, sales, acquisitions, leasing, and property tax assessments. Appraisers consider multiple factors when determining a property's value, such as its location, physical condition, size, amenities, comparable sales data, income potential (if income-producing), and prevailing market conditions. The process typically involves thorough research, analysis, and documentation to provide an accurate valuation that reflects the property's current market value. Appraisals play a vital role in helping property owners, investors, lenders, and other stakeholders make informed decisions regarding the property's utilization, investment potential, and financial viability.

‍Asking rent
The rental rate that a landlord or property owner advertises or lists for available space within a property. It represents the initial amount of rent that the landlord seeks to charge prospective tenants for leasing the space. The asking rent is typically expressed as a price per square foot per year (e.g., dollars per square foot per annum) or occasionally as a monthly rate. Landlords determine the asking rent based on various factors, including the property's location, size, condition, amenities, market demand, and prevailing rental rates in the area. While the asking rent serves as the initial negotiation point between landlords and tenants, actual lease agreements may involve adjustments based on factors such as tenant improvements, lease terms, concessions, and prevailing market conditions. The asking rent provides a starting point for lease negotiations and helps both landlords and tenants gauge market trends and competition within the commercial real estate market.

Capital expenses (Cap ex)
Capital expenses, or cap ex, denote significant expenditures by property owners for property acquisition, enhancement, or maintenance, distinct from routine operational costs. Examples include major renovations, structural repairs, and property acquisitions, aimed at augmenting property value and longevity. Owners often allocate funds from reserves or secure financing to cover these expenses, crucial for property quality, attractiveness, and market value preservation.

Capitalization rate (Cap rate)
The capitalization rate, or cap rate, is a fundamental metric in commercial real estate used to evaluate the return on investment (ROI) for income-producing properties. It's calculated by dividing the property's net operating income (NOI) by its current market value or purchase price. This rate reflects the potential return an investor can expect from the property, serving as a measure of its profitability and risk. Typically expressed as a percentage, a higher cap rate suggests higher potential returns but may also indicate higher risk or lower property value, while a lower cap rate implies lower risk and higher property value but may yield lower returns.

‍Full-service (FS) rental rate
The full-service rental rate, often abbreviated as FS, refers to a leasing arrangement in commercial real estate where the rent charged by the landlord covers all operating expenses associated with the leased space. This includes expenses such as property taxes, insurance, maintenance, utilities, and janitorial services. Unlike other lease structures where tenants may be responsible for paying additional costs separately (such as in triple-net leases), the full-service rental rate simplifies the financial obligations for tenants, providing them with a predictable monthly rent amount. This type of lease is common in office buildings and retail spaces where landlords seek to attract tenants by offering a comprehensive package of services and amenities included in the rent.

‍Gross rental income
The total revenue generated from leasing out a property before deducting any expenses. It encompasses all rental payments received from tenants occupying the space, including base rent and any additional income from ancillary sources such as parking fees or utility reimbursements. Gross rental income provides landlords and property owners with a snapshot of the property's revenue-generating potential, serving as a key metric for assessing the financial performance and profitability of a real estate investment. This figure is instrumental in evaluating the property's overall financial health and determining its value in the market.

Modified gross (MG) rental rate
The modified gross (MG) rental rate is a leasing arrangement where the tenant pays a base rent plus a portion of the operating expenses, such as utilities, maintenance, and property taxes. Unlike a triple-net (NNN) lease where the tenant is responsible for all operating expenses, in a modified gross lease, some expenses are typically included in the rent, while others may be paid separately by the tenant. This type of lease offers a middle ground between a gross lease, where the landlord covers all expenses, and a triple-net lease, where the tenant bears most expenses. The specifics of what expenses are included and excluded can vary depending on the terms negotiated between the landlord and the tenant. Modified gross leases provide flexibility for both parties and are commonly used in commercial real estate leasing.

‍Net operating income (NOI)
Net operating income (NOI) is a key financial metric used in commercial real estate to evaluate the profitability of an income-producing property. It is calculated by subtracting operating expenses from the property's gross rental income. Operating expenses typically include property management fees, property taxes, insurance, utilities, maintenance, and repairs. NOI provides investors and property owners with a clear picture of the property's ability to generate income after accounting for operating costs. It is a crucial factor in determining the value of a property and assessing its investment potential. A higher NOI indicates greater profitability and a more attractive investment opportunity, while a lower NOI may signal potential challenges or inefficiencies in property management or operations. Investors often use NOI to compare different investment opportunities and make informed decisions about buying, selling, or holding commercial real estate assets.

Occupancy cost
The total expense associated with leasing and maintaining a property, typically expressed on a per-square-foot basis. It encompasses various expenditures incurred by tenants, including base rent, common area maintenance (CAM) charges, property taxes, insurance, utilities, and other operating expenses. Occupancy cost is a critical metric for tenants as it helps assess the financial impact of leasing a particular space and enables comparison between different leasing options. For landlords, understanding the occupancy cost can aid in pricing their properties competitively and attracting tenants.

Price per square foot (Price / Sqft)
Price per square foot (Price / Sqft) is a common metric used in commercial real estate to measure the value or cost of a property based on its size. It represents the price of a property divided by its total square footage. This metric allows buyers, sellers, landlords, and tenants to compare the cost or value of different properties on an equal basis, regardless of their size. Price per square foot is often used in sales and leasing transactions to negotiate prices, determine fair market value, and assess the affordability or investment potential of a property. It provides a standardized way to analyze real estate transactions and helps stakeholders make informed decisions about buying, selling, or leasing commercial properties. Price per square foot can vary depending on factors such as location, property type, condition, and market conditions.

Triple-net (NNN) rental rate
The triple-net (NNN) rental rate is a leasing structure commonly used in commercial real estate, particularly in commercial leases for retail and industrial properties. In a triple-net lease, the tenant is responsible for paying not only the base rent but also all additional expenses associated with the property, including property taxes, insurance, and maintenance costs. This type of lease shifts the majority of the operating expenses from the landlord to the tenant, providing the landlord with a predictable income stream while minimizing their financial obligations for property upkeep. The triple-net rental rate typically reflects the base rent plus the estimated costs of property taxes, insurance, and common area maintenance, which are passed on to the tenant as additional expenses. This structure offers tenants more control over their operating expenses but also requires them to budget for potential fluctuations in property-related costs. Triple-net leases are often long-term agreements and are favored by landlords seeking stable and passive income from their properties.

Market factors

Absorption rate
The absorption rate is a key metric used in commercial real estate to measure the pace at which available space in the market is leased or sold over a specific period, typically expressed in square feet or units per month or year. It provides valuable insights into the balance between supply and demand within a particular market or submarket. A high absorption rate indicates strong demand relative to supply, suggesting a healthy and potentially competitive market for property owners and developers. A low absorption rate may signal oversupply or sluggish demand, which could lead to downward pressure on rental rates and increased vacancies. Real estate professionals use absorption rate data to analyze market trends, forecast future demand, and make informed decisions regarding property investment, development, and leasing strategies. It is calculated by dividing the total square footage or units leased or sold during a specified period by the total available square footage or units in the market, multiplied by the number of months in the period.

Comparable sales (Comps)
Comparable sales, also known as comps, are recent transactions of similar properties in the same or similar area that are used to determine the fair market value of a property. In commercial real estate, comparable sales play a crucial role in property valuation, appraisal, and market analysis. Real estate professionals use comps to assess the value of a subject property by comparing its characteristics, such as size, location, age, condition, and amenities, to those of recently sold or leased properties. By analyzing comparable sales data, investors, appraisers, and brokers can determine the market value of a property, identify trends, and make informed decisions regarding pricing, buying, selling, or leasing commercial real estate assets. Additionally, comparable sales data provides valuable insights into market conditions, helping stakeholders gauge supply and demand dynamics, assess competition, and forecast future property values and investment opportunities.

Leased space
Leased space refers to the portion of a commercial property that has been rented out to tenants under lease agreements. Leased space typically includes office suites, retail stores, industrial warehouses, or other types of commercial premises that are occupied by tenants for business purposes. Landlords or property owners lease space to tenants in exchange for rental payments, which are typically based on the terms negotiated in the lease agreement. Leased space can vary in size, configuration, and use, depending on the specific requirements of the tenant and the property type. It is an essential metric in assessing the occupancy status and financial performance of a commercial property, as well as in analyzing market trends and rental income potential. Additionally, tracking leased space helps landlords and investors monitor tenant retention, lease expirations, and overall portfolio occupancy rates.

Net absorption
Net absorption in commercial real estate refers to the difference between the total amount of leased space and the total amount of vacated space within a specific market area during a defined period, typically a quarter or a year. It serves as a crucial indicator of market activity and trends, helping stakeholders assess the balance between supply and demand within the market. Positive net absorption indicates increasing demand and occupancy, while negative net absorption suggests declining demand or an oversupply of space. Net absorption data influences pricing, rental rates, and investment decisions within the CRE market.

Occupied space
The portion of a building or property that is currently leased or in use by tenants. It represents the area within a building that is actively utilized for business operations or other purposes specified in the lease agreement. Occupied space may encompass offices, retail storefronts, industrial warehouses, or any other type of commercial space. For tenants, the amount of occupied space directly correlates with their leasing obligations, including rent payments and maintenance responsibilities. Landlords monitor the occupancy status of their properties to track rental income, assess tenant satisfaction, and identify opportunities for lease renewal or expansion.

‍Vacancy factor
The percentage of unoccupied or vacant space within a building or property relative to its total rentable square footage. It provides a measure of the overall vacancy level within a property or market. A higher vacancy factor indicates a greater proportion of empty space, while a lower vacancy factor suggests a higher level of occupancy. Landlords and property owners closely monitor the vacancy factor to assess market conditions, evaluate property performance, and make informed decisions regarding leasing strategies and rental rates. Tenants may consider the vacancy factor when exploring leasing options to gauge the availability of space and negotiate favorable lease terms.

Vacancy rate
The percentage of available rental units or space within a specific market or property that is currently unoccupied and available for lease. Vacancy rate is a key metric used by landlords, investors, and industry professionals to assess the health and performance of the real estate market. A higher vacancy rate typically indicates an oversupply of space relative to demand, potentially leading to downward pressure on rental rates and increased competition among landlords. Conversely, a lower vacancy rate suggests a tighter market with limited available space, which may result in higher rental rates and greater landlord leverage in lease negotiations. Vacancy rates are influenced by various factors, including economic conditions, tenant demand, new construction, and market dynamics, and are often analyzed alongside absorption rates and leasing activity to provide insights into market trends and investment opportunities.

Vacant space
Any portion of a property, building, or development that is unoccupied and available for lease or sale. This space may include individual offices, retail storefronts, industrial warehouses, or entire floors within a building. Vacant space represents potential income for property owners and landlords and is a critical factor in assessing the performance and value of a real estate asset. Monitoring the amount of vacant space in a market or property helps stakeholders understand supply and demand dynamics, gauge market conditions, and make informed decisions regarding leasing strategies, marketing efforts, and investment opportunities. Factors such as location, property condition, market trends, and economic conditions can influence the availability and attractiveness of vacant space to prospective tenants.

Building/space information

Air rights
The legal right to use or control the space above a property's surface, typically extending vertically upward to the sky. In commercial real estate, air rights grant the property owner or developer the authority to build structures or installations above their property, such as buildings, signs, or other improvements, without infringing on the airspace of neighboring properties or violating zoning regulations. These rights are often subject to local zoning ordinances, building codes, and land use regulations, which may impose restrictions on the height, size, and type of structures that can be erected. Air rights can have significant value, particularly in densely populated urban areas where land is scarce and development opportunities are limited. They are commonly bought, sold, leased, or transferred independently of the underlying land, allowing property owners to maximize the potential use and economic value of their real estate assets. Proper management and negotiation of air rights are essential considerations in commercial real estate development projects, as they can impact the design, density, and profitability of development initiatives.

Amenities
Additional features or facilities beyond the basic necessities of a property that enhance its appeal, functionality, and value to tenants or users. Amenities can vary widely depending on the type of property and its target market but may include features such as fitness centers, swimming pools, conference rooms, parking facilities, on-site dining options, recreational areas, concierge services, security systems, and landscaping. Amenities are often used as marketing tools to attract tenants, increase tenant satisfaction, and differentiate a property from competing options in the market. They contribute to the overall tenant experience and can influence leasing decisions, tenant retention rates, and rental rates. Effective amenity planning and management are crucial for property owners and developers seeking to create desirable and competitive environments that meet the needs and preferences of their target audience while maximizing the property's marketability and long-term success.

Building size
The total amount of space within a building, typically measured in square feet or square meters. It encompasses the entire floor area, including all levels and any additional structures attached to the main building. Building size is a fundamental metric used to assess the scale and capacity of a property, providing valuable information for potential tenants, investors, and developers. It helps determine the building's suitability for various uses, such as office, retail, industrial, or residential, and influences factors such as rental rates, occupancy costs, and property valuations. Additionally, building size plays a crucial role in zoning regulations, building codes, and construction planning processes, shaping the design, layout, and functionality of the property. Understanding the building size is essential for stakeholders involved in real estate transactions, leasing negotiations, property management, and urban planning initiatives.

Ceiling height
The vertical distance from the finished floor to the lowest point of the ceiling or overhead structure within a building. Ceiling height is an important architectural and functional characteristic that can significantly impact the usability and value of a property. Ceiling height influences various aspects of building design, occupancy, and tenant satisfaction. For example, taller ceilings can create a sense of spaciousness, enhance natural light penetration, and accommodate specialized equipment or machinery in industrial or warehouse facilities. In office spaces, higher ceilings may contribute to a more open and collaborative work environment. Ceiling height also affects interior design choices, such as lighting fixtures, HVAC systems, and partitioning configurations. Additionally, building codes and zoning regulations may impose minimum height requirements for certain types of commercial buildings to ensure safety, accessibility, and comfort for occupants. Understanding the ceiling height is crucial for tenants, landlords, developers, and architects when evaluating properties, planning renovations, and optimizing space utilization.

Class A building
A high-quality and prestigious property that typically offers superior amenities, modern design, and prime location within a market. These buildings are considered top-tier and attract high-profile tenants such as multinational corporations, law firms, financial institutions, and tech companies. Class A buildings are known for their exceptional construction quality, state-of-the-art infrastructure, and sophisticated architectural features. They often boast amenities like onsite fitness centers, conference facilities, concierge services, and upscale dining options. Additionally, Class A buildings are strategically situated in prominent business districts or desirable neighborhoods with convenient access to transportation hubs, major highways, and other essential amenities. Due to their premium attributes, Class A buildings command higher rental rates and tend to maintain high occupancy levels even during economic downturns. Investors value Class A properties for their stable income streams, strong tenant demand, and potential for long-term appreciation.

Class B building
A property that offers good quality and functional space but may lack some of the premium features and amenities found in Class A buildings. Class B buildings are often characterized by their solid construction, older design, and moderate rental rates compared to Class A properties. While they may not boast the same level of luxury or modern infrastructure as Class A buildings, Class B properties still provide adequate accommodations for tenants seeking cost-effective options with reasonable amenities. These buildings may include features such as ample parking, basic security systems, and standard building services. Class B buildings are commonly found in secondary business districts or suburban areas where rental rates are lower than prime urban locations. Despite being older or less prestigious than Class A properties, Class B buildings can offer attractive investment opportunities for landlords and tenants looking for affordable office space with functional layouts and convenient access to transportation and amenities.

Class C building
A property that offers basic functionality and amenities, often with older infrastructure and minimal modernization. These buildings usually have lower rental rates compared to Class A and Class B properties due to their age, condition, and location in less desirable areas. Class C buildings may exhibit signs of wear and tear, such as outdated mechanical systems, limited amenities, and less appealing aesthetics. Despite these drawbacks, Class C buildings can still serve as viable options for tenants seeking budget-friendly space, especially in markets where Class A and Class B properties are scarce or expensive. Landlords of Class C buildings may focus on providing affordable rents and basic services to attract tenants, making them suitable for small businesses, startups, or companies with tight budgets. While Class C buildings may require more maintenance and upkeep compared to higher-class properties, they can offer opportunities for investors seeking value-add strategies or redevelopment projects to enhance their long-term appeal and value within the market.

Co-tenancy
A contractual agreement or provision within a lease that stipulates the relationship between multiple tenants occupying the same property or complex. Co-tenancy clauses typically outline conditions under which tenants can benefit from shared resources, such as common areas, amenities, and services. These clauses may also address issues related to the mix of tenants within a property, specifying requirements for anchor tenants or key occupants whose presence can attract foot traffic and customers to the overall development. Co-tenancy provisions are important considerations for both landlords and tenants, as they can influence leasing strategies, rental rates, and the overall dynamics of a commercial property. For tenants, co-tenancy clauses may offer protections or incentives based on the performance or presence of other tenants within the same development. Conversely, landlords may use co-tenancy clauses to maintain a balanced tenant mix, preserve the attractiveness of the property, and mitigate risks associated with tenant turnover or vacancies. Overall, co-tenancy provisions play a crucial role in shaping the relationships and interactions between tenants and landlords within commercial real estate environments.

‍Common area
Shared spaces within a property or building complex that are accessible to and used by multiple tenants and visitors. These areas are typically maintained and managed by the landlord or property management team and may include amenities such as lobbies, hallways, restrooms, elevators, stairwells, parking lots, sidewalks, landscaped areas, and recreational facilities. Common areas contribute to the overall functionality, convenience, and appeal of a commercial property, enhancing the experience for tenants and visitors alike. Landlords often allocate common area maintenance (CAM) expenses among tenants based on their proportionate share of the leased space, as these costs cover the upkeep, repair, and operation of shared facilities and amenities. Additionally, common areas may be subject to rules and regulations outlined in lease agreements or property bylaws, governing matters such as usage, cleanliness, security, and permissible activities. Effective management of common areas is essential for fostering a positive environment, promoting tenant satisfaction, and preserving the value of the commercial property over time.

‍Date available
The specific date on which a space or property is expected to be ready for occupancy by a tenant. This date is typically indicated in marketing materials, lease agreements, and property listings to inform prospective tenants of the timing for leasing or moving into the space. It represents the point at which the landlord or property owner has completed any necessary preparations, such as construction, renovation, or tenant improvements, to make the space suitable for occupancy according to the terms negotiated in the lease agreement. The date available may vary depending on factors such as the completion of construction or renovation work, the fulfillment of lease terms and conditions, and any required regulatory approvals or permits. Clarity regarding the date available is crucial for both landlords and tenants to facilitate smooth transitions, coordinate move-in logistics, and ensure that expectations regarding occupancy timelines are met.

‍Floors
The levels or stories within a building that are designated for occupancy or use. The number of floors in a building can vary depending on its size, design, and intended use. For multi-story buildings, each floor typically contains separate spaces or units that may be leased or utilized by different tenants. The number of floors in a building is an important consideration for tenants when evaluating space options, as it can affect factors such as accessibility, visibility, and convenience. Buildings with multiple floors often feature amenities such as elevators, staircases, and common areas to facilitate movement between levels and enhance the overall tenant experience. Floor designation is commonly indicated in property listings, lease agreements, and marketing materials to provide prospective tenants with essential information about the layout and configuration of available space within a building.

LEED® certification
Leadership in Energy and Environmental Design, or LEED® certification is a widely recognized rating system developed by the U.S. Green Building Council (USGBC) to evaluate the environmental performance and sustainability of buildings. It provides a framework for building owners and developers to design, construct, operate, and maintain buildings in an environmentally responsible manner. LEED® certification is awarded based on various criteria related to sustainable site development, water efficiency, energy efficiency, materials selection, indoor environmental quality, and innovation in design. Buildings that achieve LEED® certification are recognized for their commitment to reducing environmental impact, conserving resources, and creating healthier spaces for occupants. This certification is often sought after by tenants seeking environmentally friendly and sustainable properties for their operations, as it demonstrates a building's adherence to high environmental standards and its alignment with sustainability goals.

Parking ratio
The ratio of parking spaces available to the total square footage of a building or development. Parking ratio is typically expressed as a numerical value representing the number of parking spaces per unit of square footage (e.g., 3 parking spaces per 1,000 square feet). The parking ratio is an important consideration for tenants and property owners as it affects the accessibility and convenience of the property for employees, customers, and visitors. A higher parking ratio indicates a greater availability of parking spaces relative to the building size, which may be desirable for businesses with a larger workforce or frequent customer traffic. A lower parking ratio may require tenants to implement alternative transportation solutions or allocate resources for additional parking accommodations. The parking ratio can vary depending on local zoning regulations, building type, and usage requirements, and it is often a key factor in site selection and leasing decisions for commercial real estate tenants.

Preleased space
Preleased space refers to commercial real estate space that has been leased to a tenant before the completion of construction or renovation. In this scenario, the landlord secures a lease agreement with a tenant prior to the space being available for occupancy. Preleasing is common in new developments or major renovations where the landlord seeks to secure tenants to mitigate leasing risk and attract financing for the project. For tenants, preleased space offers the advantage of securing desirable locations or customized space tailored to their specific needs before it becomes available to the broader market. Preleasing agreements typically outline the terms and conditions of the lease, including rent, lease term, build-out specifications, and any other relevant provisions.

Rentable building area
The total amount of space within a commercial building that is available for lease to tenants. It includes all areas within the building that can be occupied or utilized by tenants, such as individual office suites, retail spaces, common areas, and amenities. The rentable building area is typically calculated by adding together the square footage of each floor, including any shared or common areas, and excluding non-rentable spaces such as mechanical rooms, stairwells, and utility closets. This measurement is essential for determining the total leasing potential of a property and for establishing rental rates based on the usable square footage available to tenants. It provides landlords and property managers with a standardized metric for marketing and leasing commercial spaces, helping to facilitate transparent and efficient leasing transactions within the commercial real estate market.

Rentable square feet (RSF)
Rentable square feet (RSF) refers to the total square footage of a commercial property that can be leased to tenants for occupancy. It includes both the usable area, which is the actual space the tenant occupies exclusively, and a portion of the common areas such as hallways, lobbies, restrooms, and other shared spaces within the building. The RSF is calculated by adding the usable area to a proportionate share of the common areas. This measurement is crucial for both landlords and tenants in determining the amount of space available for lease and for calculating lease costs based on the agreed-upon rental rate per square foot. RSF is a standard metric used in commercial real estate leasing to provide transparency and consistency in space measurement across different properties and buildings.

Shadow space / Phantom space
Shadow space, also known as phantom space, refers to the portion of a commercial property that is currently leased but not actively utilized by the tenant. This space may include areas such as unused offices, storage rooms, or common areas that are not part of the tenant's operational requirements. Shadow space exists when a tenant leases more space than they need initially, intending to grow into it over time. Landlords often offer shadow space as an incentive to attract tenants or as part of lease negotiations. While shadow space generates rental income for the landlord, it may not contribute to the tenant's immediate operational needs. Understanding shadow space is essential for both landlords and tenants in assessing the true utilization and value of leased premises, as well as in negotiating lease terms and rental rates.

Square feet (SF) available
The amount of square footage within a commercial property that is currently vacant and ready for occupancy by tenants. Square feet (SF) available represents the space that is actively being marketed by landlords or leasing agents to potential tenants. SF available is a crucial metric in commercial real estate that helps landlords and tenants understand the current availability of space within a property and assess potential leasing opportunities. This information allows tenants to identify suitable spaces for their business needs and helps landlords effectively market and lease their properties. Tracking SF available also provides valuable insights into market conditions, such as vacancy rates and demand for commercial space, which can influence leasing decisions and rental pricing strategies.

Sublet space
A portion of leased commercial property that the original tenant leases out to another party, known as the subtenant, for a specified period within the original lease term. The original tenant, or sublessor, retains responsibility for the lease obligations to the landlord, including rent payments, maintenance, and adherence to lease terms. Subletting space allows the original tenant to offset some of their leasing costs or to utilize space that exceeds their immediate needs. Subtenants benefit from obtaining space on flexible terms and often at a lower rental rate than if they were to lease directly from the landlord. However, subletting arrangements require careful negotiation and documentation to ensure that all parties understand their rights and responsibilities under the sublease agreement.

Total inventory
The complete stock of available properties within a specified market or geographic area. Total inventory in CRE encompasses all types of commercial properties, including office buildings, retail spaces, and industrial warehouses, among others. Total inventory provides a comprehensive view of the real estate landscape, allowing investors, developers, and brokers to assess market conditions, identify trends, and make informed decisions about buying, selling, or leasing properties. It’s a fundamental metric for understanding the supply side of the real estate market and is often analyzed alongside other key indicators such as absorption rates, vacancy rates, and leasing activity to gauge market dynamics and investment opportunities.

Usable area
The portion of a building or property that can be effectively utilized by tenants for their specific business purposes. It excludes common areas such as hallways, stairwells, and mechanical rooms, focusing solely on the space that tenants can occupy and use for their operations. Usable area is an essential metric for both landlords and tenants, as it directly impacts lease negotiations, rental rates, and overall space utilization efficiency. Landlords typically measure and advertise usable area to prospective tenants to provide a clear understanding of the space available for occupancy. Tenants evaluate usable area to ensure that it meets their spatial requirements and accommodates their business needs. Understanding the usable area helps stakeholders accurately assess the value and functionality of a commercial property.

Walk score
A numerical rating assigned to a property or neighborhood, indicating its pedestrian-friendliness and proximity to amenities, services, and public transportation options. It provides an objective measure of how convenient it is to accomplish daily tasks and errands on foot within a certain area. Factors contributing to a higher walk score typically include proximity to grocery stores, restaurants, schools, parks, and public transit stops. Commercial real estate professionals, including tenants and landlords, may consider walk scores when evaluating properties for lease or purchase, as they can influence the desirability and value of a location. A higher walk score often correlates with increased foot traffic, potential customer base, and overall attractiveness to tenants seeking accessible and vibrant urban environments. Lower walk scores may indicate a reliance on automobiles for daily activities, potentially limiting the appeal of a property to certain demographics.

Year built
Year built refers to the calendar year in which a commercial property, such as an office building, retail center, or industrial facility, was originally constructed or completed. It provides crucial historical information about the age and structural integrity of the property, serving as a fundamental aspect of its property profile. Understanding the year built helps stakeholders, including tenants, landlords, investors, and developers, assess the property's condition, potential for renovations or upgrades, and compliance with modern building codes and standards. Additionally, the year built can influence the property's architectural style, technological infrastructure, and overall market value, as older buildings may possess unique historical features or require more extensive maintenance and modernization efforts compared to newer constructions.

‍Year renovated
Year renovated refers to the calendar year in which significant renovations, upgrades, or improvements were made to a commercial property after its original construction. Renovations can encompass various aspects of the property, including structural changes, interior design updates, technological enhancements, and energy efficiency improvements. The year renovated provides valuable insight into the property's current condition, modernization efforts, and compliance with contemporary standards and regulations. For tenants, landlords, investors, and developers, understanding the year renovated is crucial for assessing the property's overall appeal, functionality, and potential return on investment. Renovations can enhance the property's marketability, attract higher-quality tenants, and increase its competitive advantage within the market by offering modern amenities and features. Additionally, the year renovated may influence lease terms, rental rates, and property valuations, as updated properties often command higher demand and value compared to outdated counterparts.

Location/development

Building permits
Official documents issued by local government authorities that grant permission for the construction, renovation, or alteration of structures within a specified jurisdiction. These permits are required to ensure that construction projects comply with building codes, zoning regulations, safety standards, and other relevant laws and ordinances. They typically outline the scope of work, construction plans, materials to be used, and other details necessary to ensure compliance with local regulations. Obtaining a building permit is a crucial step in the development process, as it signifies legal authorization to proceed with construction activities. Failure to obtain the necessary permits can result in fines, project delays, or even the halting of construction activities. Building permits play a vital role in safeguarding public safety, protecting property values, and maintaining the integrity of the built environment.

Build-out
The process of customizing or renovating an existing space to meet the specific requirements and preferences of a tenant. This process typically occurs after the execution of a lease agreement and involves modifications to the interior of the leased premises to accommodate the tenant's operational needs and branding aesthetics. Build-out activities may include the installation or removal of walls, partitions, fixtures, and other structural elements, as well as the implementation of electrical, plumbing, HVAC (heating, ventilation, and air conditioning), and technological infrastructure. Build-out projects often encompass cosmetic enhancements such as painting, flooring, lighting, and signage to create a tailored environment that reflects the tenant's identity and supports their business objectives. Throughout the build-out process, brokers collaborate closely with landlords, contractors, architects, and other stakeholders to ensure that the work is completed according to the agreed-upon specifications, budget, and timeline. By overseeing the build-out process, tenant representatives help facilitate a smooth transition for tenants into their new space.

Central business district (CBD)
The core downtown area of a city or urban area. The CBD is a city’s primary commercial and financial hub, housing a concentration of office buildings, retail establishments, hotels, and other businesses. The CBD typically features high-density development, with skyscrapers and multi-story buildings dominating the skyline. Due to its central location and accessibility, the CBD often commands higher property values and rental rates compared to other parts of the city. It serves as a focal point for commerce, employment, and cultural activities, attracting businesses, workers, and visitors alike. Additionally, the CBD is characterized by well-developed transportation infrastructure and amenities to accommodate the needs of its diverse population and workforce.

Certificate of occupancy (CO)
An official document issued by local government authorities that certifies a building's compliance with applicable building codes, zoning regulations, and other laws, allowing it to be occupied or used for its intended purpose. The CO confirms that the construction or renovation work has been completed according to approved plans and specifications, and that the building is safe and suitable for occupancy. It typically includes details such as the building's address, permitted use, occupancy classification, maximum occupancy load, and any special conditions or restrictions. A CO is typically required before a new building can be occupied or a renovated building can be reoccupied. It serves as evidence that the building meets all necessary requirements for occupancy, providing assurance to tenants, owners, lenders, and regulatory authorities that the property is in compliance with applicable regulations. Obtaining a CO is a critical milestone in the development process, signaling that the property is ready for use and occupancy. Failure to obtain a CO may result in legal consequences, fines, or restrictions on occupancy until compliance is achieved.

Entitlements
The legal rights granted by government authorities to property owners or developers, allowing them to undertake certain land use and development activities. These rights typically include permissions, approvals, permits, and zoning variances necessary for the development, construction, or modification of a property. Entitlements can encompass a wide range of approvals, such as zoning changes, land use permits, subdivision approvals, environmental permits, and building permits. The process of obtaining entitlements involves navigating complex regulatory requirements, engaging with various stakeholders, and complying with local planning and zoning regulations. Entitlements play a crucial role in determining the allowable land use, density, building height, setbacks, parking requirements, and other parameters that govern development projects. Securing entitlements is often a prerequisite for initiating development projects, as it establishes the legal framework within which property improvements can occur. Failure to obtain necessary entitlements can delay or derail development plans, resulting in costly delays, redesigns, or legal challenges. Therefore, understanding and effectively managing the entitlement process is essential for successfully executing commercial real estate projects.

Exurban
Areas located beyond the suburbs, typically characterized by low population density and rural or semi-rural landscapes. Exurban areas are often situated at the periphery of metropolitan regions, beyond the urban core and suburban fringe. These areas are characterized by large expanses of undeveloped or agricultural land, interspersed with low-density residential developments, rural communities, and natural landscapes. Exurban regions are known for offering a balance between proximity to urban amenities and the tranquility of rural living, attracting residents seeking spaciousness, natural beauty, and a slower pace of life. From a commercial real estate perspective, exurban areas present opportunities for various types of development, including residential, retail, recreational, and industrial projects. Developers may capitalize on available land and lower land costs compared to urban or suburban areas, catering to the demand for housing, retail services, and recreational facilities from exurban residents. However, exurban development also poses challenges related to infrastructure provision, transportation access, environmental conservation, and community planning. As such, navigating the complexities of exurban real estate development requires careful consideration of local regulations, market dynamics, and community needs.

Suburban
Areas located outside the central business district (CBD) of a city, typically characterized by lower population density, larger land parcels, and a focus on residential and commercial developments. Suburban areas often offer a mix of office buildings, retail centers, and residential communities, catering to businesses and residents seeking a balance between urban conveniences and a more spacious environment. Suburban CRE markets may exhibit different trends and dynamics compared to urban or exurban areas, with factors such as transportation infrastructure, demographics, and local zoning regulations influencing property values and investment opportunities.

Urban
Densely populated areas characterized by high-rise buildings, mixed land use, and diverse economic activities. Urban environments typically feature vibrant street life, cultural amenities, and efficient transportation networks. From a CRE perspective, urban areas offer opportunities for various types of development, including office buildings, retail spaces, residential complexes, and mixed-use projects. Due to their central location and accessibility, urban properties often command higher rents and property values compared to suburban or exurban areas. However, urban development also presents challenges such as limited space, higher construction costs, and zoning restrictions. Successful urban real estate projects require careful consideration of market demand, regulatory requirements, and community engagement to create sustainable and livable urban spaces.

Work letter
In commercial real estate leasing, a work letter, also known as a construction letter or tenant improvement allowance, is a contractual agreement between the landlord and tenant outlining the scope of construction or tenant improvements to be performed within the leased premises. The work letter specifies the responsibilities of both parties regarding the design, construction, and funding of improvements to the space. It typically details the construction specifications, materials, finishes, and any other requirements for the build-out or renovation of the premises to meet the tenant's specific needs or use requirements. The work letter may address various aspects of the construction process, including the allocation of costs, project timelines, contractor selection, permit requirements, and approval procedures for plans and changes. It may also specify the amount of financial assistance provided by the landlord, known as the tenant improvement allowance, to offset the costs incurred by the tenant for the construction or improvement work. The terms of the work letter are negotiated as part of the overall lease agreement and serve to define the rights and obligations of both parties with respect to tenant improvements and alterations to the leased space.

‍Zoning
The regulatory framework that governs land use and development within a specific area. Zoning regulations divide land into different zones or districts, each with its own set of permitted uses, building requirements, and density restrictions. These regulations help guide urban planning, manage growth, and protect the character of neighborhoods. Common zoning categories include residential, commercial, industrial, and mixed-use zones. Zoning laws may also include provisions for setbacks, building height limits, parking requirements, and environmental considerations. Understanding zoning regulations is crucial for CRE professionals as they assess property suitability, navigate permitting processes, and advise clients on development opportunities. Compliance with zoning laws ensures that proposed projects align with local planning objectives and community needs, contributing to sustainable and harmonious urban environments.

Technology terms

CRE deal platform
A CRE deal platform refers to an online or software-based system designed to facilitate commercial real estate transactions and streamline the deal-making process. These platforms provide a centralized hub where real estate professionals, including brokers, investors, landlords, and tenants, can access property listings, market data, financial analytics, and collaboration tools. CRE deal platforms offer features such as property search filters, virtual tours, document management, digital signatures, and communication channels for negotiating deals. By leveraging technology, these platforms enhance transparency, efficiency, and accessibility in the CRE industry, allowing stakeholders to identify opportunities, conduct due diligence, and close transactions more effectively.

Commercial real estate software
Commercial real estate software refers to specialized technology solutions designed to streamline various aspects of managing, analyzing, and transacting commercial real estate properties. These software applications cater to a wide range of stakeholders, including property owners, landlords, tenants, brokers, investors, and property managers. Commercial real estate software encompasses a diverse set of tools and platforms that serve different purposes, such as property management, lease administration, financial analysis, portfolio management, asset tracking, tenant relationship management, and transaction management. These software solutions leverage advanced features like data analytics, automation, reporting capabilities, and integration with third-party services to improve efficiency, decision-making, and collaboration. By centralizing property-related data and processes, commercial real estate software helps users optimize property performance, mitigate risks, and capitalize on opportunities in the market.

Deal data
Deal data refers to information and statistics related to commercial real estate transactions, including sales, leases, and other agreements. This data typically includes details such as property addresses, transaction dates, buyer/seller or landlord/tenant information, transaction amounts, lease terms, square footage, and other relevant factors. Deal data is essential for market analysis, trend identification, benchmarking, and decision-making purposes in the commercial real estate industry. It provides insights into market activity, pricing dynamics, investment trends, and the overall health of the real estate market. Analyzing deal data allows stakeholders such as investors, developers, brokers, and lenders to assess market conditions, evaluate investment opportunities, and make informed strategic decisions. Deal data may be used by industry professionals to identify emerging market trends, gauge market competitiveness, and forecast future market movements.

Proptech
Proptech, short for property technology, refers to the use of technology to innovate and optimize processes and services within the real estate industry. It encompasses a wide range of technological solutions and platforms designed to enhance various aspects of real estate operations, including property management, leasing, sales, construction, development, and investment. Proptech solutions leverage advancements in areas such as artificial intelligence, data analytics, blockchain, virtual reality, and cloud computing to streamline workflows, improve efficiency, enhance customer experiences, and drive innovation in the real estate sector. Examples of proptech applications include property management software, online listing platforms, digital leasing and transaction tools, smart building technologies, predictive analytics for market forecasting, and crowdfunding platforms for real estate investment. Proptech is transforming the way real estate professionals and property owners manage, market, and monetize properties.

‍Tenant representation software
Tenant representation software, or tenant rep software, is a specialized technology solution designed to assist tenant representatives in their commercial real estate transactions. This software typically provides tools and features tailored to the unique needs of tenant representation brokers, helping them manage client relationships, track property listings, analyze market data, create customized reports, and streamline the leasing process. Tenant rep software may offer functionalities such as property search and comparison, document management, collaboration tools for team communication, and client relationship management (CRM) capabilities. By centralizing critical data and automating repetitive tasks, tenant rep software enables brokers to work more efficiently, make informed decisions, and deliver enhanced services to their clients.