CRE Acronyms
CRE Acronyms 2
CRE Acronyms 3
Construction Components
Back to Basics
Lease Literacy
Legal Mumbo Jumbo
I can't do WHAT??
Money, Money, Money!!
100

PRS

Pro-Rata Share?

100

YTD & MTD

Year-to-date &

Month-to-date

100

OFB / DOP

Open for Business

Delivery of Premises

100

What does MEP stand for?

Mechanical, Electrical, Plumbing

100

What is a base year?

The first calendar year of a tenants commercial rental period.

100

What is holdover and what is the typical rate you see?

Holdover is the increased rental rate of Base Minimum Rent (BMR) should a tenant remain in their space beyond the lease expiration date.

Typical rate you see is 150%

100

What is a guarantor responsible for?

They are responsible to perform the contractual obligations of a lease if the other party shall fail to so perform. Guarantors for lease obligations may either be personal or corporate.

100

What is cotenancy?

A clause which provides remedies to a tenant in the event that another tenant (typicaly an anchor or jr. anchor) ceases operations at the property.

100

Explain what recoup means.

Operating expense recovery - how much of the expense is recovered by the tenants.

200

GLA

Gross Leasable Area?

200

KPI

Key Performance Indicator

200

TIA

Tenant Improvement Allowance

200

What is an RFP? Who prepares it?

Request for Proposal - the person who is requesting bids from multiple parties (typically a Property or Construction Manager).

200

What is an exclusive? Give an example.

An exclusive use clause, or "exclusive" reflects the agreement of the Landlord to not allow any other tenants within the center to use their respective premises for a specific use, whether selling certain products or providing certain services. i.e. grocery store, pizza, beauty supply, discount variety, etc.

200

What is an option?

A material consideration granted to a tenant in a lease - example could be several option to extend their lease at Fair Market Value, a ROFO or a ROFR.

200

What does it mean when a tenant goes dark?

When a tenant ceases operations  at a property.

200

What is a control area?

An area in the common area outside of a tenant space in which a tenant's lease allows them control for approvals.

200

Explain percentage rent and in which situations you would see it the most.

A form of rent paid into addition to, or in lieu of, BMR, specifically pertaining to a tenant's percentage of gross sales. It can be paid with or without a breakpoint.

300

PCA or PCR

Property Condition Assessment

or Property Condition Report

300

FMV

Fair Market Value

300

BMR

Base Minimum Rent

300

What is a retail stacking plan/standard?

The way/plan for which vehicles will be "stacked" or placed to accommodate ingress/egress, most directly tied to drive-through use.

300

What is a LCD and RCD? Explain the differences

LCD - Lease Commencement Date

RCD - Rent Commencement Date

The lease may commence on a certain date but Base Minimum Rent (BMR) can start on a separate date depending on lease provisions (most especially if a construction period is allowed).

300

Explain an expense pool.

Different operating expense categories in which different tenants participate in. Most commonly you see insurance and tax in a different category and sometimes you can see trash removal, Fire & Life Safety and roof. Different expense pools change the denominator and a tenant's PRS of that expense category.

300

What does writ of possession mean?

An order from the court after allowing LL to take back legal possession of the space and forces the current tenant out.

300

What is a blackout period and what dates do you typically see for them?

A period or months indicated in a tenant lease that prohibits work to be done in the common area. You can sometimes see this in major tenant leases where they do not allow construction at any time from October through December.

300

What is the industry standard percentage for a management fee in commercial real estate?

3% to 5%

400

FF&E

Furniture, Fixtures & Equipment

400

CMU

Concrete Masonry Unit

400

LOI

Letter of Intent

400

What is the difference between a grey shell and white or vanilla shell (a.k.a grey box or white box)?

A grey shell/box is unfinished and can have exposed wiring, unfinished floors, plumbing and electrical. White/vanilla shell/box is finished with drywall and ready for tenant finishes.

400

What is force majeure?

A lease clause the protects one or more parties (usually the LL) from liability in the event of a major unforeseen event ("acts of God") such as natural disasters, endemics, pandemics, government acts and labor strikes

400

What is a breakpoint?

The point in which additional rent kicks in. This applies to percentage rent when a tenants gross sales exceed a certain dollar amount (breakpoint) and they begin to pay a percentage of their sales, most often in addition to their BMR.

400

Explain the general meaning of a cure period.

The time for which a tenant can "cure" or remedy a default - whether it's by monetary (paying their balance in full) or by fixing whatever item they were defaulted for (non-monetary default).

400

What is a no-build area?

A specific location in the common area where a tenants lease indicates LL cannot build upon.

400

Explain controllable expenses and give 3 examples of them.

All operating expenses which are within reasonable control of LL (landscaping, lighting, parking lot R&M, lot sweeping). Noncontrollable expenses are taxes, insurance, utilities and other costs beyond LL control.

500

GAAP

Generally Accepted Accounting Principles

500

CTI

Cam, Tax, Insurance

500

EUL

Expected Useful Life

500

What is a studor vent and where do you commonly see it on a commercial property?

A studor vent is a type of plumbing fixture that contains a one-way diaphragm valve to allow air into drain pipes while preventing sewer gases from escaping. Best found on a roof.

500

What is a ROFO and ROFR?

What's the difference between the two?

Right of First Offer - the right of tenant to match the terms of a proposed contract before it's executed.

Right of First Refusal - the right providing tenant the first option of leasing a particular available space before LL offers it to third parties. 

The key difference is that a ROFR has the existence of a Third-Party offer.



500

CAM cap - explain what it is.

The limit or ceiling "cap" on the amount of CAM expenses that tenants are responsible for. This means if a CAM expense exceeds the cap, the tenant is not required to pay anything additional of such cap.

500

What happens to FF&E at the natural lease expiration?

It stays with the space if there is no leasehold interest in it.

500

What are typical expenses that you see as CAM Exclusions?

Management Fees, Admin Fees, CAPEX, legal fees, marketing or promo fees

500

What is the difference between CAM, Amortized CAM and CapEx?

CAM - Expenses are passed through within the year it is incurred. Expenses are not depreciable.

Amortized CAM - Expenses are typically large projects that are passed through on an amortized basis through the reconciliation starting in the year the project was completed. Most Amortized CAM expenses are not depreciable.

CapEx - Expenses are major replacements. They are still amortized and passed through in the same manner as Amortized CAM. All capital expenses can be depreciated.

600

SOX

Sarbanes Oxley

(A methodology of compliance that requires publicly traded companies to establish financial reporting standards, logging electronic records for auditing and proving compliance.)

600

REA/OEA

Reciprocal Easement Agreement or

Operation and Easement Agreement

600

SSNOI

Please explain it as well.

Same Store Net Operating Income

A properties income less operating expenses. 

We want to see growth every year in the SSNOI to assure our shareholders that our properties are performing well.

600

What is a building fenestration and list two common types of it.

It is a reference to openings in the building envelope - windows, doors and skylights.

600

What is a denominator?

How does a denominator change? Please explain

The denominator is the defined area or dividable number in which a PRS is calculated. 

A denominator can change when different tenants participate in different expenses (i.e. anchor tenant does not pay into waste so the denominator is the GLA minus that anchor space).

600

What is a CPI? 

Consumer Price Index - a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. CPI increases (and sometimes decreases) in rent required to be paid by a tenant based upon the CPI changes over a specified period of time.

600

What is a kickout clause and another name for it?

A “Kick-out Clause”, also known as a “Cancellation Clause” is a clause in a lease in which a landlord can evict a tenant or a tenant may vacate the space, after a certain period of time has passed, if certain needs or threshold's are not met.

600

Explain what use restrictions are. Give me an example of one.

Prohibited uses within a shopping center. Examples are sale of adult or pornographic materials, manufacturing plants, car washes, funeral homes, car or motorcycle sales, flea markets, etc.

600

Why would a recovery (recoup) be so low for a property? Can you explain?

CAM Exclusions, fixed CAM, Gross leases, CAM caps

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