Americans With Disabilities Act passed by Congress in 1994 with intent to provide persons with disabilities accommodations and access equal to or similar to that of the general public.

Any amounts due under a lease that are in addition to base rent. Most common forms are operating expenses and real estate taxes.

A dollar amount provided by the Landlord under a lease to be used by the Tenant for a specific purpose, typically improvements/changes to the space. Allowances can vary widely and are negotiated as part of the overall deal. If the expense exceeds the allowance amount, such excess is the Tenant’s responsibility.

Payment of debt in regular, periodic installments of principal and interest, as opposed to interest only payments. May also be used in a lease where the landlord incurs costs for additional tenant improvements which are effectively treated as a debt and repaid by tenant over the term of the lease.

A transfer to another of any property, real or personal, or any rights or estates in said property. Common assignments are of leases, mortgages, deeds of trust, but the general term encompasses all transfers of title.

The existing shell condition of a building prior to the installation of tenant improvements. This condition varies from building to building, landlord to landlord, and generally involves the level of finish above the ceiling grid.

A specific amount used either as a minimum rent in a lease (retail) which uses a percentage of sales or overage for additional rent or sets a base onto which is added expenses and taxes in a net lease or increases in those items in a fully serviced lease.

The 12 month period upon which a direct expense escalation of rent is based. Typically the calendar year the lease commences.

Building Owners and Managers Association. BOMA publishes the definition of rentable and useable area, which is used to determine the square footage leased in most commercial office buildings.

Common Area Maintenance charges. Those charges levied on or the expenses incurred in maintaining the common areas of a building.

The date on which a lease begins. This is typically but not always the day on which the tenant takes possession of the leased space, which usually occurs upon substantial completion of the tenant improvements. (See occupancy Date).

Class is usually used in conjunction with an office property and refers to the quality of property: Example: Class A equals the newest properties in the best locations, with upgraded finishes, amenities and services.

Common area is the area used in common by the tenants of an office building. Common area includes building and elevator lobbies, restrooms and the corridor leading from an elevator lobby to a tenant space.

A statement issued by a local government verifying that a newly constructed building is in compliance with all codes and may be occupied.

The walled off and secured area of a leased space, separated from spaces leased to others (by a “demising” wall). Also measured as useable area.

The rate of interest used in a present value analysis representing the “time value of money”.

The average per square foot rent paid by the tenant over the term of a lease. Takes into account only free rent and stepped rents. Does not include allowances, space pockets, free parking and other similar landlord concessions.

A clause in a lease providing for an increased rental at a future time. May be accomplished by several types of clauses, such as: (1) fixed increases -a clause which calls for a definite, periodic rental increase; (2) cost of living -a clause which ties the rent to a government cost of living index, with periodic adjustments as the index changes; (3) direct expense -the rent adjusted according to changes in the expenses of the property paid by the lessor, such as tax increases, increased maintenance costs, etc.

An instrument which itself prevents individuals from later asserting facts different from those contained in the document. Often required by the buyer of an office building. The tenant and landlord both sign the estoppel certificate, confirming the lease and pertinent facts thereto. Thereafter, neither party may make claims to the contrary.

A right granted by the landlord to the tenant whereby the tenant has the option(s) to add more space to its premises pursuant to the terms of the option(s).

A concession granted by a landlord to a tenant whereby the tenant is excused from paying rent for a stated period during the lease term. Free rent typically comes in the form of Net Free rent, where the tenant is still responsible for paying additional rent charges or Gross Free rent.

A lease in which the stated rent includes the operating expenses of the building. Same as Fully Serviced Lease. Opposite of Net Lease.

A lease of land only, (either vacant or exclusive of any buildings on it). Usually a net lease on a long term basis (30 years+). Ground rent should not be charged back to the tenant as an operating expense.

An alternative workspace concept where rather than having an assigned exclusive workspace, an employee accesses one space, perhaps being one of many such spaces in common with others on an as needed basis, and otherwise works outside of the office.

Heating, Ventilation, Air Conditioning. A general term encompassing any system designed to heat and cool a building in its entirety, as opposed to a space heater.

The party (usually the owner) who gives the lease (right to possession) in return for a consideration (rent).

The specific period of time in which the Landlord grants to the tenant the right to possession of real estate. Example: Office leases are typically 5-7+ years in length

The party to whom a lease (the right to possession) is given in return for a consideration (rent).

There are potentially multiple uses of this term. Generally a written statement that two parties to a prospective transaction (buyer/seller or lessor/lessee) intend to proceed to a final agreement in good faith on stated principal business terms of the deal to be entered into. This meaning applies when executed by both parties. Alternatively such a document may be signed only by one party and is then an indication of a willingness to enter into agreement on the stated terms and conditions. Letters of intent should contain language clearly stating that they’re not legally binding. However, an obligation to continue to negotiate in good faith to conclusion can be created.

In a lease, the load factor is the multiplier to a tenant’s useable space that accounts for the tenant’s proportionate share of the common area (restrooms, elevator lobby, mechanical rooms, etc.). The load factor is usually expressed as a percentage and ranges from a low of 5% for a full tenant to as high as 20% for a multi-tenant floor. Often referred to as the difference between Useable and Rentable SF.

A lease controlling subsequent leases. May cover more property than subsequent leases. For example: “A” leases an office building, containing 5 offices, to “B”. “B” subsequently obtains landlord consent and subleases the ten offices individually. The ten subleases from “B” as sublessor are controlled by the lease from “A” to “B” (master lease).

(See also “Triple Net”). Today this generally indicates a lease in which the stated rent excludes the insurance, utilities, operating expenses and real estate taxes for the building. The tenant is then responsible for the payment of these costs either directly or as additional rent. Opposite of Gross Lease.

The calculation of NPV takes into account both the netting of cost and benefits and the time value of money. See Present Value.

Any cost or charge incurred by a tenant pursuant to its lease, such as rent, operating expense increases, parking charges, moving expenses, remodeling costs, etc.

Unless specifically stated otherwise in the lease, it is the date on which the tenant takes possession of its leased premises. (See also “Commencement Date”). Many times early occupancy for the purposes of set-up and cabling can be granted if construction of improvements has been completed.

The cost of operating an office building, such as janitorial, management fees, utilities, and similar day to day expenses, as well as taxes, insurance, and a reserve for replacement of items which periodically wear out. Should not include capital expenses such as roof replacement nor expenses associated with the production of income such as leasing commissions and legal fees.

An agent who is an advocate for the owner and/or landlord.

An increase in operating expenses over the base year amount that is billed to the tenant as additional rent. See escalation.

The present value is the amount that must be invested now to produce the known future value. For any sum invested at a given interest rate, the amount one would receive at the end of the period can be determined by taking the investment times one (1) plus the interest rate of the period to the power of the period. For example, if $10 is invested in an interest rate of 10% for one year, the investment would grow to $11 at the end of the year. It follows, then, that $11 one year from now is worth $10 today; that is $10 is the present value of $11.

A standard applied in a lease (most often in a sublease clause) which limits the landlord’s ability to withhold consent in its sole discretion. If a reasonable person would give consent to an action given the circumstances, so must the landlord. Commonly written that the Landlord’s consent shall not be reasonably withheld, delayed or conditioned.

The right of a tenant to renew (extend the term of) a lease for a stated period of time at a rent to be determined or at the amount set forth in the lease for a renewal term.

Consideration paid for the occupancy and use of real property.

The (square footage) for which rent can be charged. Generally it is the gross area of the full floor less the area of all vertical penetrations (elevator shafts, stairwells, mechanical shafts etc.) Rentable area can be measured in many ways, but the most common measurement for office buildings is according to BOMA standards.

The amount of Rent paid for the occupancy and use of real property. Typically stated on a per square foot per year basis. Example: a 5,000sf space that has a gross rental amount of $25sf would have a total annual rent amount of $125,000 or about $10,417 per month

A document typically issued by a tenant’s agent to an owner(s) of real property, inviting the owner(s) to submit a proposal to the tenant for the leasing of a vacant space. The RFP sets forth the specific areas important to the tenant, such as the space in question, the lease term, renewal options, signage, rental rates and improvements allowances to be provided by the owner.

A right, usually given by an owner to a tenant, which gives the tenant a first chance to buy the property or lease a portion of the property if the owner decides to sell or lease. Unlike under a Right of First Refusal, the owner is not required to have a legitimate offer which the tenant can then match or refuse. If the tenant refuses to make an offer or if the parties cannot agree on terms, the property can then be sold or leased to a third party.

A right, usually given by an owner to a tenant, which gives the tenant a first chance to buy the property or lease a portion of the property if the owner decides to sell or lease. The owner must have a legitimate offer which the tenant can match or refuse. If the tenant refuses, the property can then be sold or leased to the party making the offer.

Term is often loosely used. Most often it is the planning of the layout of the interior space of a building to meet the needs of the user. Landlords will many times pay for an initial space plan and one revision as an inducement to show their space is a good fit for a prospect.

A scenario in which a lessee no longer has a need for, part or all, of a space where they still have a remaining lease term. They may sublet the space to another group, subject to the consent of the landlord. The sublease (and sublessor) is still bound to the covenants of the original lease, but is usually offered at a reduced rate to entice interest in the space.

To make subject or junior to.

Generally used in reference to the construction of tenant improvements (TIs). The tenant’s premises is typically deemed to be substantially completed when all of the TIs for the premises have been completed in accordance with plans and specifications previously approved by the tenant. Sometimes used to define the commencement date of a lease.

A holder of an interest in property for a specific term under a lease or other rental agreement

Improvements to land or buildings to meet the needs of tenants. May be new improvements or remodeling, and be paid for by the landlord, tenant or part by each.

An agent who is an advocate for the tenant.

A lease requiring the tenant to pay in addition to a fixed rental, the expenses of the property leases, such as taxes, insurance, maintenance, utilities, cleaning etc.

Referring to an owner making a property ready for a tenant to begin business by having the tenant furnish only furniture, phone and inventory, if any. Turnkey tenant improvements are provided at the landlord’s expense according to plans and specifications previously agreed upon by the parties. Unlike an allowance where the tenant pays for costs in excess of the allowance amount, the landlord bears the risk of construction in a turnkey situation.

Process by which costs can be decreased or benefits can be added to an undertaking or project through redesign, prioritization or other similar actions.

The secured area (square footage) occupied exclusively by tenant within a tenant’s leased space. The useable area times the load factor for common area results in rentable area on which rent is charged. Useable area can be measured in many ways, but the most common measurement for office buildings is according to BOMA standards.

Specifications for tenant improvements usually attached to a lease and/or letter of intent. The work letter provides the basis for working drawings and contractor pricing and may allocate costs between the parties. Also establishes critical dates for approval of drawings and processes.

Drawings prepared by a licensed architect and used by contractors in the construction of tenant improvements. Shows all architectural detail including: electric, plumbing and demo/construction of walls. Also referred to as construction drawings