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 accommodate a Tenant’s requirements.

Absolute Net: Under this type of lease a Tenant pays all costs of operating, maintaining and repairing the building, real estate taxes and utilities, in addition to base rent. Often the Tenant is directly responsible both for all such costs and for the active handling of the items themselves.

Absorption Rate: This is an estimate of the amount of rentable space leased in a given year and is used to forecast leasing activity as a measure of market strength.

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

Additional Rent: Any rent amount over and above base rent or net rent that a Tenant has to pay to the Landlord. Usually it includes the Realty Taxes, Operating Costs and Hydro.

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 can then be applied to the usable square footage to determine the rentable square footage upon which the Tenant will pay rent.

Agency: An agent is an entity contracted to act on your behalf.

Allowance Over Building Shell: Most often used in a yet-to-be-constructed property, the Tenant has a blank canvas upon which to customize the interior finishes to their specifications. This arrangement caps the Landlord’s expenditure at a fixed dollar amount over the negotiated price of the base building shell. This arrangement is most successful when both parties agree on a detailed definition of what construction is included and at what price.

Alternative Workspace: Refers to any non-traditional office space usage such as telecommuting, hotelling, office sharing and open office plans.

Amortization: When you amortize a loan, you pay it off with periodic installments that are composed of principal plus interest.

Amps: A unit of measure of current (amperes) flowing in a circuit. Used to measure available electrical power supplied to a building.

Anchor Tenant: The major or prime Tenant in a shopping center, building, etc.

Appraisal: An opinion or estimate of the value of property made by a qualified appraiser based on relevant current market data.

Architect: A professional who is registered, licensed or certified to practice architecture within a jurisdiction administered by a governmental agency or an architectural association legally mandated by the government.

Area Maintenance (CAM): Fees charged by the Landlord to the Tenant for maintaining and operating common areas of the building such as lobbies, courtyards, hallways elevators, etc.

As-is Condition: This means that the Tenant agrees to take the space in the condition it is currently in and agrees to be responsible for any necessary repairs or improvements.

Asking Rental Rate: The listed or advertised rental rate for space available for lease. The rate is influenced by the prevailing market supply and demand conditions for comparable space.

Assessed Value: The value of real property as determined by a municipality for property tax purposes.

Assignment: A method of transferring title to property from one person to another.

Attornment: Under this type of agreement a Tenant agrees to remain a Tenant in the event that the Landlord changes because of a mortgage default.

Average Gross Rent: Average annual contract rent over the lease term, including the cost of combined operating expenses and real estate taxes minus any rent abatements.

Average Net Rent: Average annual contract rent over the term of the lease, excluding the cost of combined operating expenses, real estate taxes and any rent abatements.

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