Commercial real estate can sometimes seem overwhelming with the various terms that are used. Brush up on your leasing lingo with terms, phrases or words you may come across in your commercial real estate dealings.
Amenities
A feature that provides comfort, convenience, or value to a property.
Arrears
Overdue payments on a rental agreement where recurring payments are required.
Bank Guarantee
A promise to pay Lessor an amount to cover losses
Building Types;
A Grade – Prime Building
B Grade – Secondary Buildings
C Grade – Older Buildings
Covenant
A condition as part of a deed or title in property that prohibits someone from doing/using the property in a certain way
CPI
Consumer Price Index
Depreciation
Accounting method to write off the cost of an asset over its life
Disclosure Statement
A summary of important commercial terms of the lease and financial obligations including rent, rent reviews, incentives, outgoings, make good, key provisions
Gross Lease
Rent which includes outgoings
HOA
Heads of Agreement (a formal leasing proposal only)
Lessee
Tenant (or its legal entity)
Lessor
Landlord (or its legal entity)
Make Good
An agreement on how a property should be left at the end of the lease term
NABERS
National Australian Build Environment Rating System
Net Lease
Rent plus outgoings
Option
Additional non mandatory lease term
Outgoings
Expenses associated with the property
Strata Title
Individual ownership of part of a property ‘a lot’
WALE
Weighted Average Lease Expiry
Yield
Calculation of the measurement of income. The yield is calculated annually as a percentage of the cost of the asset.
Written by
James Maxwell
Senior Leasing Manager
james@roseandjones.com.au
