Glossary - A-B, C-E, F-K, L-O, P-R, S-U, V-Z

Face Rental Rate
The “asking” rental rate published by the landlord.

Fair Market Value
The sale price at which a property would change hands between a willing buyer and willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. Also known as FMV.

Fiduciary
A person who represents another on financial/property matters.

Finance Charge
The amount paid for the privilege deferring payment of goods or services purchased, including any charges payable by the purchaser as a condition of the loan.

First Generation Space
Generally refers to new space that is currently available for lease and has never before been occupied by a tenant. See also ""Second Generation Space.

First Mortgage
The senior mortgage which, by reason of its position, has priority over all junior encumbrances. The holder of the first or senior mortgage has a priority right to payment in the event of default.

First Refusal Right or Right Of First Refusal (Adjacent Space)
A lease clause giving a tenant the first opportunity to lease additional space that might become available in a property at the same price and on the same terms and conditions as those contained in a third party offer that the owner has expressed a willingness to accept. This right is often restricted to specific areas of the building such as adjacent suites or other suites on the same floor.

First Refusal Right or Right Of First Refusal (Purchase)
A lease clause giving a tenant the first opportunity to buy a property at the same price and on the same terms and conditions as those contained in a third party offer that the owner has expressed a willingness to accept.

Fixed Costs
Costs, such as rent, which do not fluctuate in proportion to the level of sales or production.

Fixtures
Personal property so attached the land or building (e.g., improvements) it is considered part of the real property.

Flex Space
A building providing its occupants the flexibility of utilizing the space. Usually provides a configuration allowing a flexible amount of office or showroom space in combination with manufacturing, laboratory, warehouse distribution, etc. Typically also provides the flexibility to relocate overhead doors. Generally constructed with little or no common areas, load-bearing floors, loading dock facilities and high ceilings.

Floor Area Ratio (FAR)
The ratio of the gross square footage of a building to the land on which it is situated. Calculated by dividing the total square footage in the building by the square footage of land area.

Force Majeure
A force that cannot be controlled by the parties to a contract and prevents said parties from complying with the provisions of the contract. This includes acts of God such as a flood or a hurricane or, acts of man such as a strike, fire or war.

Foreclosure
A procedure by which the mortgagee (“lender”) either takes title to or forces the sale of the mortgagor’s (“borrower”) property in satisfaction of a debt. See also ""Deed In Lieu Of Foreclosure"".

Full Recourse
A loan on which an endorser or guarantor is liable in the event of default by the borrower.

Full Service Lease
A term used to describe a lease in which the stated rent amount being paid to the Landlord includes all the expenses of the building (electricity, water, gas, janitorial, RE taxes, insurance, etc..). Usually the tenant may have to pay for the overages (see term) that occur as years unfold.

Full Service Rent
An all-inclusive rental rate that includes operating expenses and real estate taxes for the first year. The tenant is generally still responsible for any increase in operating expenses over the base year amount. See also ""Pass Throughs"".

Future Proposed Space
Space in a proposed commercial development which is not yet under construction or where no construction start date has been set. Future Proposed projects include all those projects waiting for a lead tenant, financing, zoning, approvals or any other event necessary to begin construction. Also may refer to the future phases of a multi-phase project not yet built.

General Contractor
The prime contractor who contracts for the construction of an entire building or project, rather than just a portion of the work. The general contractor hires subcontractors, (e.g., plumbing, electrical, etc.), coordinates all work, and is responsible for payment to subcontractors.

General Partner
A member of a partnership who has authority to bind the partnership. A general partner also shares in the profits and losses of the partnership. See also “Limited Partnership”.

Grace Period
Additional time allowed to complete an action (e.g., make a payment) before a default or violation occurs.

Graduated Lease
A lease, generally long term in nature, which provides that the rent will vary depending upon future contingencies, such as a periodic appraisal, the tenant’s gross income or simply the passage of time.

Grant
To bestow or transfer an interest in real property by deed or other instrument; either the fee or a lesser interest, such as an easement.

Grantee
One to whom a grant is made.

Grantor
The person making the grant.

Gross Absorption
A measure of the total square feet leased over a specified period of time with no consideration given to space vacated in the same geographic area during the same time period. See also “Net Absorption”.

Gross Building Area
The total floor area of the building measuring from the outer surface of exterior walls and windows and including all vertical penetrations (e.g. elevator shafts, etc.) and basement space.

Gross Lease
A lease of property whereby the landlord (i.e., lessor) pays for all property charges usually included in ownership. These charges can include utilities, taxes, and maintenance, among others.

Ground Rent
Rent paid to the owner for use of land, normally on which to build a building. Generally, the arrangement is that of a long-term lease (e.g. 99 years) with the lessor retaining title to the land.

Guarantee of Lease
Signer (guarantor) assures Landlord that Tenant signing the lease will pay the rent. If not, the signer (guarantor) will be obligated to fulfill the lease. Used when the Tenant may be financially weak, or substantial tenant improvement work is requested by the Tenant. Guarantor can be a corporation or a person.

Guarantor
One who makes a guaranty. See also “Guaranty”.

Guaranty
Agreement whereby the guarantor undertakes collaterally to assure satisfaction of the debt of another or perform the obligation of another if and when the debtor fails to do so. Differs from a surety agreement in that there is a separate and distinct contract rather than a joint undertaking with the principal. See also ""Guarantor"".

Hard Cost
The cost of actually constructing the improvements (i.e. construction costs). See also “Soft Cost”.

High Rise
In the Central Business District, this could mean a building higher than 25 stories above ground level but in suburban sub-markets, it generally refers to buildings higher than 7 or 8 stories.

Highest and Best Use
The use of land or buildings which will bring the greatest economic return over a given time which is physically possible, appropriately supported, financially feasible.

Holding Over
A situation whereby a tenant is still occupying the space after their lease has expired. It can occur with or without the landlords consent. Often, hold over periods are pre-stated in the lease, and the tenant will incur a rent increase (i.e. 125% of current rate) until they vacate or renegotiate the lease.

Holdover Tenant
A tenant who remains in possession of leased property after the lease term expiration.

HVAC
The acronym for “Heating, Ventilating and Air-Conditioning”.

Improvements
In the context of leasing, the term typically refers to the improvements made to or inside a building but may include any permanent structure or other development, such as a street, sidewalks, utilities, etc. See also “Leasehold Improvements”. See also “Leasehold Improvements” and ""Tenant Improvements"".

Incompetent
An individual who is unable to handle his own affairs by reason of some medical condition (e.g., insanity, Alzheimer's).

Indirect Costs
Development costs, other than material and labor costs which are directly related to the construction of improvements, including administrative and office expenses, commissions, architectural, engineering and financing costs.

Instrument
A written legal document created to secure the rights of the parties participating in the agreement.

Inventory
The total amount of rentable square feet of existing and any forthcoming space (whether it be a tenant vacating space or new buildings coming on the market), in a given category, for example, all warehouse space in a specified submarket. Inventory refers to all space within a certain proscribed market without regard to its availability or condition, and categories can include all types of leased space such as office, flex, retail and warehouse space.

Irrevocable
Incapable of being altered, changed, or recalled.

Joint Tenancy
Ownership of real property by two or more individuals, each of whom has an undivided interest with the right of survivorship.

Judgment Lien
An encumbrance that arises by law when a judgment for the recovery of money attaches to the debtor’s real estate. See also ""Lien"".

Judgment
The final decision of a court resolving a dispute and determining the rights and obligations of the parties. Money judgments, when recorded, become a lien on real property of the defendant.

Just Compensation
Compensation which is fair to both the owner and the public when property is taken for public use through condemnation (eminent domain). The theory is that in order to be “just”, the property owner should be no richer or poorer than before the taking.