Lease Literacy
Written document that addresses the negotiated lease terms agreed to between landlord and tenant before creating the lease document.
What is a letter of intent (LOI)?
This is the additional rent charged to a tenant to maintain the common areas.
What are CAM (Common Area Maintenance) fees?
If WE could only wear one color of clothes for the rest of our lives, what color would most of the team be wearing?
What is Blue?
Value equal to one-hundredth of one percentage point. For example, 100 (?) points = 1 percentage point.
What is a basis point (BP)?
Right to be the only business that sells a certain product or provides a specific service.
What is an Exclusive Right clause?
The actual costs associated with running a property.
What are Operating Expenses?
This drink is preferred by most team members.
What is coffee?
Improvements (as opposed to repairs) to a fixed asset that will increase the value or useful life of that asset. A (?) is typically amortized or depreciated over the useful life of the asset, as opposed to a repair, which is expensed in the year incurred.
What are capital expenses (CapEx)?
These are negotiated into leases - examples include free rent, free parking, tenant improvements.
What are concessions?
The net change in occupied space in a market or building between now and a prior period.
What is net absorption?
The Mascot of this team member's alma mater is Sir Henry, The Scarlet Knight.
Who is Ken Traenkle.
Revenue minus all operating expenses
What is Net Operating Income (or NOI)?
A lease clause giving the tenant the right to extend the term of a lease at a predetermined rate.
What is a renewal option?
The ratio of the net operating income divided by the annual debt service requirement.
Lenders use this ratio as a risk measure.
What is a Debt Coverage Ratio or (Debt-service Coverage Ratio)
Which 2 team members, with rhyming names, want to visit the Grand Canyon?
Who are Kellie & Ellie?
Management Fees, Admin Fees, CAPEX, legal fees, marketing or promo fees.
What are typical expenses that you see as CAM Exclusions?
Type of lease where tenant pays base rent and then separately pays their share of operating expenses and real estate taxes.
What is a net lease?
The term used to describe the reasonable return on investment, also known as "free and clear return."
What is Capitalization Rate (Cap Rate)?
These 2 Team Members are Trekkies
(Trekkie: a fan of the science fiction programs/films Star Trek)
Who are David C & Leslye?
U.S. Internal Revenue Code Section (?) permits the deferral of capital gains taxes on the sale of property held for investment or productive use in a trade or a business. With this, property owners can sell their real estate and then reinvest the proceeds in ownership of alike-kind property or several like-kind properties, thus deferring the capital gains taxes.
What is a 1031 Exchange or Like-kind Exchange?