CBRE FSG Glossary of Real Estate
Terms
1031 Exchange - answer Section 1031 of the Internal Revenue Code permits like-kind
property used in trade or business, or held as an investment, to be exchanged for other
similar property tax-free.
Abatement - answer A reduction or decrease; usually applies to the forgiveness of rent
or a decrease of assessed valuation of ad valorem taxes after the assessment and levy.
Above Building Standard - answer Specialized design and engineering services and all
construction necessary to personalize tenant space.
Absolute Net Lease - answer1) A lease in which the tenant has agreed to pay the
landlord (or owner) a basic rent. This amount usually covers debt service (mortgage,
principal, and interest) and a profit for the landlord. Tenant also agrees to be
responsible and separately pay for all maintenance, operating, and other expenses of
the building and/or office suite. These separate items would include utilities (electric,
gas), all building maintenance, operating expenses (HVAC, elevator contracts, etc.),
janitorial services, real estate taxes, insurance premiums, etc. 2) Similar to a Triple Net
lease except that the tenant pays for capital improvements and deferred maintenance
costs as well as operating expenses. The tenant pays expenses usually associated with
ownership.
Absorbed Space - answerNet change in leased space between two dates.
Absorption - answerThe rate at which land or buildings will be sold or leased in the
marketplace during a predetermined period of time, usually a month or a year. Also
called "Market Absorption".
Absorption Period - answerThe number of months required to convert vacant space into
leased space assuming no new delivered space. Computed by dividing the average
monthly-absorbed space during a recent period into the current vacant space.
Absorption Rate - answerA number usually expressed as the amount of total square
feet (but sometimes as a percentage of the total amount of space that was vacant) of
office space that has been put under a lease (not necessarily occupied) between two
periods of time.
Abstract - answerA detailed summary of a lease.
,Acceleration Clause - answerWhen used in a mortgage or deed of trust, a clause that
contains provisions and conditions that, often at the lender's option, permit the time
when the entire debt becomes due to be shortened. (See Alienation Clause)
Acre - answer43,560 SF
Ad Valorem Tax - answer1) According to value. Used in reference to general property
tax, which is usually based on the official valuation of property. 2) A tax or duty based
on value and levied as a percentage of that value.
Adjacencies - answerA term used in space planning to describe how physically close to
each other different staff or entire departments must be for an efficient work
environment.
Adjustable Rate Mortgage (ARM) - answer1) A mortgage in which the interest rate is
adjusted periodically to reflect changes in a specified index. 2) A long-term loan in which
the lender may periodically "adjust" the interest rate based on a government index.
Agency - answer1) When a broker/agent is working for a landlord as the exclusive
leasing agent for a building. Also, an agency exists when a broker/agent is working with
an exclusive letter of representation from a tenant. 2) Legal relationship between a
principal and an agent. An agency is considered a fiduciary relationship, where the
agent represents the principal and acts only with the principal's consent and are subject
to his direction and control.
Aggregate Rent - answerPart of a financial analysis on the economic terms of a lease
that imputes or provides an estimate of the total dollar value of the lease and the total
dollar outlay a tenant will make or have made at various points in time, such as at the
end of five or ten years. The financial analysis will take into account estimates for
increases or escalations in base rent, increases in real estates taxes, increases in
operating expenses, expenses for tenant improvements paid for by the tenant, credit for
tenant improvements paid for by the landlord, rent abatement, plus any other dollar-
valued item in the lease.
Air Rights - answerThe space or air above a piece of property that by definition legally
belongs to or is attached to the property. The air rights of a property can be transferred,
sold, or rented. The term is often associated with a building that has been built over
property that is being used for another purpose (the building is said to be using the air
rights). The most common examples of an air rights building are those built over a
railroad track or right-of-way, or over a road or highway.
Alienation Clause - answerA type of acceleration clause where a debt becomes due in
its entirety upon the transfer of ownership of a secured property. (See Due on Sale
Clause and Acceleration Clause)
,All Space Available - answerAll existing space in a market available for lease by
tenants, including sublet and prime space.
Allowance - answerThe quantities or dollar values of materials as specified in the
building standard work letter.
Alterations - answerA lease clause prohibiting any construction, structural or non-
structural additions or improvements, or placement of any fixed decorations in a tenant's
office space without the written consent of the landlord. A lease may require that all
tenant alterations must be done by or through the landlord's contractor.
Amenities - answerAny material goods, services, or intangible items that increase the
comfort, attractiveness, desirability, and/or value of an office suite or an office building
(for example, dry cleaning establishment, low-to-high-priced restaurants, in-building or
covered parking, health club).
Amortization - answer1) The gradual repayment of debt by means of systematic, even
payments of principal and/or interest over a set time period; at the end of the time
period, there is a zero balance. 2) The reduction of the total value of a debt by taking
equal (amortized) installments over its actual life.
Amortization Schedule - answerSchedule portraying the systematic and continuous
payment of an obligation through installments until such time as that debt has been paid
in full.
Amount Financed - answerThe loan amount after the subtraction of prepaid finance
charges, such as discount points, origination fee and prepaid interest.
Anchor Tenant or Key Tenant - answerAny major tenant, such as a large department or
discount store or supermarket, which forms the nucleus of a modern shopping center.
The anchor tenant is the mainstay that draws the public and stabilizes the center by
assuring a profitable operation for all the other tenants. Anchor tenants are usually
sought out first by developers, and they are usually given favorable leases.
Annual Percentage Rent (APR) - answerAPR reflects the cost of a loan on a yearly
basis. It may be higher than the note rate because it includes interest, loan origination
fees, loan discount points and other credit costs paid to the lender.
Annualized Sales - answerExpanding on an annual basis: a procedure whereby taxable
income from sales for a fractional year is multiplied by a fraction equal to 12 divided by
the number of months in the shorter period. The resulting tax is then reduced by
application of the same formula reversed.
Anticipatory Breach - answerOccurs when one party to a contract, prior to time of
performance, informs the other of his or her intent not to perform. Example: the buyer
informs the seller before the closing date of his or her intent not to buy.
, Appraisal - answer1) The estimation and opinion of value placed upon a piece of land
based upon a factual analysis by a qualified professional; the process of estimation and
the report itself. 2) A process to determine or to estimate the quality and/or value of
property. Appraisals are prepared by an individual (known as an appraiser) known to be
an expert in or to have experience with assessing property value.
Appreciation - answerAn increase in the value of property caused by the improvement
of the elimination of negative factors.
Architecturals - answerA term used in lieu of "architectural drawings" and sometimes to
mean "working drawings" or "construction documents".
As Is Condition - answerPremises accepted by a buyer or tenant in the condition
existing at the time of the sale or lease, including all physical defects.
Asbestos - answerAn incombustible, fibrous mineral once widely used in construction of
buildings because of its fireproofing and insulating ability. Most forms of asbestos have
been declared health hazards and are illegal in new buildings. Federal regulation and
procedures control removal of asbestos from older buildings.
Assemblage - answerThe combining of two or more contiguous properties into one
large property. An assemblage will often make the one large property more valuable
than was the sum of its parts. In addition, assembling to a large property permits a
single larger structure to be built.
Assessed Value - answer1) Assessed value applies in ad valorem taxation and refers to
the value of a property according to the tax rolls. Assessed value may not conform to
market value, but it is usually calculated in relation to a market value base. 2) The value
placed on land and buildings by a township or county assessor for use in levying real
estate taxes.
Assessment - answer1) An estimate of property value for the purpose of imposing
taxes. 2) A fee imposed on property, usually to pay for public improvements such as
streets and sewers. 3) The determination or setting of a tax or other charge based on an
estimation of value of a building. A local government assesses a building and collects a
tax from the landlord for the value of the property. Increases in the amount of tax paid
by a landlord over some agreed-on base amount or base year estimated amount is
passed on to all of a building's tenants in proportion to the amount of office space
occupied. In certain instances, a landlord will (per the lease) estimate the next year's
increase in taxes or operating expenses that are to be passed on to the tenants. Prior to
the actual increase, the landlord will make an assessment and collect the estimated
amount from all tenants.
Assignment - answer1) A transfer between parties of title to any property, real or
personal, or of any rights or estates in the property. Common assignments include
Terms
1031 Exchange - answer Section 1031 of the Internal Revenue Code permits like-kind
property used in trade or business, or held as an investment, to be exchanged for other
similar property tax-free.
Abatement - answer A reduction or decrease; usually applies to the forgiveness of rent
or a decrease of assessed valuation of ad valorem taxes after the assessment and levy.
Above Building Standard - answer Specialized design and engineering services and all
construction necessary to personalize tenant space.
Absolute Net Lease - answer1) A lease in which the tenant has agreed to pay the
landlord (or owner) a basic rent. This amount usually covers debt service (mortgage,
principal, and interest) and a profit for the landlord. Tenant also agrees to be
responsible and separately pay for all maintenance, operating, and other expenses of
the building and/or office suite. These separate items would include utilities (electric,
gas), all building maintenance, operating expenses (HVAC, elevator contracts, etc.),
janitorial services, real estate taxes, insurance premiums, etc. 2) Similar to a Triple Net
lease except that the tenant pays for capital improvements and deferred maintenance
costs as well as operating expenses. The tenant pays expenses usually associated with
ownership.
Absorbed Space - answerNet change in leased space between two dates.
Absorption - answerThe rate at which land or buildings will be sold or leased in the
marketplace during a predetermined period of time, usually a month or a year. Also
called "Market Absorption".
Absorption Period - answerThe number of months required to convert vacant space into
leased space assuming no new delivered space. Computed by dividing the average
monthly-absorbed space during a recent period into the current vacant space.
Absorption Rate - answerA number usually expressed as the amount of total square
feet (but sometimes as a percentage of the total amount of space that was vacant) of
office space that has been put under a lease (not necessarily occupied) between two
periods of time.
Abstract - answerA detailed summary of a lease.
,Acceleration Clause - answerWhen used in a mortgage or deed of trust, a clause that
contains provisions and conditions that, often at the lender's option, permit the time
when the entire debt becomes due to be shortened. (See Alienation Clause)
Acre - answer43,560 SF
Ad Valorem Tax - answer1) According to value. Used in reference to general property
tax, which is usually based on the official valuation of property. 2) A tax or duty based
on value and levied as a percentage of that value.
Adjacencies - answerA term used in space planning to describe how physically close to
each other different staff or entire departments must be for an efficient work
environment.
Adjustable Rate Mortgage (ARM) - answer1) A mortgage in which the interest rate is
adjusted periodically to reflect changes in a specified index. 2) A long-term loan in which
the lender may periodically "adjust" the interest rate based on a government index.
Agency - answer1) When a broker/agent is working for a landlord as the exclusive
leasing agent for a building. Also, an agency exists when a broker/agent is working with
an exclusive letter of representation from a tenant. 2) Legal relationship between a
principal and an agent. An agency is considered a fiduciary relationship, where the
agent represents the principal and acts only with the principal's consent and are subject
to his direction and control.
Aggregate Rent - answerPart of a financial analysis on the economic terms of a lease
that imputes or provides an estimate of the total dollar value of the lease and the total
dollar outlay a tenant will make or have made at various points in time, such as at the
end of five or ten years. The financial analysis will take into account estimates for
increases or escalations in base rent, increases in real estates taxes, increases in
operating expenses, expenses for tenant improvements paid for by the tenant, credit for
tenant improvements paid for by the landlord, rent abatement, plus any other dollar-
valued item in the lease.
Air Rights - answerThe space or air above a piece of property that by definition legally
belongs to or is attached to the property. The air rights of a property can be transferred,
sold, or rented. The term is often associated with a building that has been built over
property that is being used for another purpose (the building is said to be using the air
rights). The most common examples of an air rights building are those built over a
railroad track or right-of-way, or over a road or highway.
Alienation Clause - answerA type of acceleration clause where a debt becomes due in
its entirety upon the transfer of ownership of a secured property. (See Due on Sale
Clause and Acceleration Clause)
,All Space Available - answerAll existing space in a market available for lease by
tenants, including sublet and prime space.
Allowance - answerThe quantities or dollar values of materials as specified in the
building standard work letter.
Alterations - answerA lease clause prohibiting any construction, structural or non-
structural additions or improvements, or placement of any fixed decorations in a tenant's
office space without the written consent of the landlord. A lease may require that all
tenant alterations must be done by or through the landlord's contractor.
Amenities - answerAny material goods, services, or intangible items that increase the
comfort, attractiveness, desirability, and/or value of an office suite or an office building
(for example, dry cleaning establishment, low-to-high-priced restaurants, in-building or
covered parking, health club).
Amortization - answer1) The gradual repayment of debt by means of systematic, even
payments of principal and/or interest over a set time period; at the end of the time
period, there is a zero balance. 2) The reduction of the total value of a debt by taking
equal (amortized) installments over its actual life.
Amortization Schedule - answerSchedule portraying the systematic and continuous
payment of an obligation through installments until such time as that debt has been paid
in full.
Amount Financed - answerThe loan amount after the subtraction of prepaid finance
charges, such as discount points, origination fee and prepaid interest.
Anchor Tenant or Key Tenant - answerAny major tenant, such as a large department or
discount store or supermarket, which forms the nucleus of a modern shopping center.
The anchor tenant is the mainstay that draws the public and stabilizes the center by
assuring a profitable operation for all the other tenants. Anchor tenants are usually
sought out first by developers, and they are usually given favorable leases.
Annual Percentage Rent (APR) - answerAPR reflects the cost of a loan on a yearly
basis. It may be higher than the note rate because it includes interest, loan origination
fees, loan discount points and other credit costs paid to the lender.
Annualized Sales - answerExpanding on an annual basis: a procedure whereby taxable
income from sales for a fractional year is multiplied by a fraction equal to 12 divided by
the number of months in the shorter period. The resulting tax is then reduced by
application of the same formula reversed.
Anticipatory Breach - answerOccurs when one party to a contract, prior to time of
performance, informs the other of his or her intent not to perform. Example: the buyer
informs the seller before the closing date of his or her intent not to buy.
, Appraisal - answer1) The estimation and opinion of value placed upon a piece of land
based upon a factual analysis by a qualified professional; the process of estimation and
the report itself. 2) A process to determine or to estimate the quality and/or value of
property. Appraisals are prepared by an individual (known as an appraiser) known to be
an expert in or to have experience with assessing property value.
Appreciation - answerAn increase in the value of property caused by the improvement
of the elimination of negative factors.
Architecturals - answerA term used in lieu of "architectural drawings" and sometimes to
mean "working drawings" or "construction documents".
As Is Condition - answerPremises accepted by a buyer or tenant in the condition
existing at the time of the sale or lease, including all physical defects.
Asbestos - answerAn incombustible, fibrous mineral once widely used in construction of
buildings because of its fireproofing and insulating ability. Most forms of asbestos have
been declared health hazards and are illegal in new buildings. Federal regulation and
procedures control removal of asbestos from older buildings.
Assemblage - answerThe combining of two or more contiguous properties into one
large property. An assemblage will often make the one large property more valuable
than was the sum of its parts. In addition, assembling to a large property permits a
single larger structure to be built.
Assessed Value - answer1) Assessed value applies in ad valorem taxation and refers to
the value of a property according to the tax rolls. Assessed value may not conform to
market value, but it is usually calculated in relation to a market value base. 2) The value
placed on land and buildings by a township or county assessor for use in levying real
estate taxes.
Assessment - answer1) An estimate of property value for the purpose of imposing
taxes. 2) A fee imposed on property, usually to pay for public improvements such as
streets and sewers. 3) The determination or setting of a tax or other charge based on an
estimation of value of a building. A local government assesses a building and collects a
tax from the landlord for the value of the property. Increases in the amount of tax paid
by a landlord over some agreed-on base amount or base year estimated amount is
passed on to all of a building's tenants in proportion to the amount of office space
occupied. In certain instances, a landlord will (per the lease) estimate the next year's
increase in taxes or operating expenses that are to be passed on to the tenants. Prior to
the actual increase, the landlord will make an assessment and collect the estimated
amount from all tenants.
Assignment - answer1) A transfer between parties of title to any property, real or
personal, or of any rights or estates in the property. Common assignments include
