Commercial Real Estate Terms - www.BuckheadAtlantaRealty.com

COMMERCIAL REAL ESTATE TERMS - www.BuckheadAtlantaRealty.com

     Here are some common commercial real estate terms that you as the consumer need to know in order to understand what your broker or the listing broker is telling you, according to www.BuckheadAtlantaRealty.com. This will be an ongoing series.

Abatement -
Often and commonly referred to as free rent or early occupancy and may occur outside or in addition to the primary term of the lease.

Above Building Standard -
Upgraded finishes and specialized designs necessary to accomodate a tenant's requirements.

Absorption -
The rate, expressed as a percentage, at which available space in the marketplace is leased during a predetermined period of time. Also referred to as market absorption.

Absorption Rate -
The net change in space available for lease between two dates, typically expressed as a percentage of the total square footage.

Ad Valorem - 
According to value. This is a tax imposed on the value of the property (references a general property tax), which is typically based on the local government's valuation of the property.

Add-On-Factor -
Often referred to as the Loss Factor or Rentable/Usable (R/U) Factor, it represents the tenant's pro-rata share of the Building Common Areas, such as lobbies, public corridors and restrooms. It is usually expressed as a percentage which then can be applied to the usable square footage to determine the rentable square footage upon which the tenant will pay rent.

Annual Percentage Rent (APR) -
The actual cost of borrowing money, expressed in the form of an annual interest rate. It may be higher than the note rate because it represents full disclosure of the interest rate, loan origination fees, loan disclosure points, and other credit costs paid to the lender.

"As-Is" Condition- 
The acceptance by the tenant of the existing condition of the premises at the time the lease is consummated. This would include any physical defects.

Assignment -
A transfer by lessee of lessee's entire estate in the property. Distinguishable from a sublease where the sublease acquires something less than the lessee's entire interest.

www.BuckheadAtlantaRealty.com will continue to publish more definitions of commercial real estate to better help you the consumer in order to make a more beneficial decision.