The average rent paid over the term by a tenant adjusted downward for concessions paid for by the landlord (such as free rent, moving expenses, or other allowances), and upward for costs that are the responsibility of the tenant (such as operating expense pass throughs). Example: Effective Rent is the rental rate net of financial concessions such as periods of abated rent and includes escalations. Although there are technically several correct methods to calculate effective rental rates, the most common method employed is a simple straight-line method. For example, assuming no escalations, if a tenant signs a two-year lease at a nominal rental rate of $1.00 per square foot per month in year 1 and receives three months of abated rent inside the lease term (the tenant pays rent during only 21 of the 24 months), the effective rental rate is computed as follows: $1.00 x 21/24 = $0.88 If the abated rent is received outside the lease term (the tenant pays rent for all 24 months, but an additional three-month rent abatement period is added to the lease term), the effective rental rate is computed as follows: $1.00 x 24/27 = $0.89
See also: Asking Rent, Average Weighted Rent, Estimated Rent, Estimated Gross Rent, Services
The ratio between the rentable area and the gross building area. This indicates a percentage of the building that can be leased, which can be compared to competing properties: Example - Rentable Area 11,500 SF / Gross Building Area 13,000 SF = .8846.
If there is/are elevators, and how many.
The number of employees the tenant has at this location.
An area designated by the U.S. government where financial incentives (such as corporate income tax credits) are provided for economic development purposes. The Empowerment Zone Employment Credit (EZ Wage Credit) give businesses an incentive to retain or hire individuals who both live and work in an Empowerment Zone (EZ). For example, individuals who work within the boundaries of the DC Enterprise Zone are eligible for a home address within the limits of the District of Columbia. The most common benefit for operations within designated zones are eligible businesses can claim a wage credit for "qualified wages" to eligible employees for operations within designated zones.
A shopping center entirely inside a roofed structure, so that entrance to the mall is controlled by a limited number of entrances and most stores are accessible only via interior corridors.
The ends of a strip center, whether the configuration is linear, L-shaped, U-shaped, or other.
A shopping center that features theaters, restaurants, amusements and related retail stores.
Increases to rent over the term of the lease, usually at a certain time period such as annual. Additionally, as an example, escalations could be semi-annual or mid-term.
A clause in a contract (lease) permitting an adjustment of certain payments (rent) either up or down over the term of the lease.
The estimated amount the tenant pays in rent per square foot per year (or month). Based on the asking rent of building at the time the tenant moved into the current building or location.
Spread/SF is the difference between the building's asking rent/SF and the tenant's rent/SF paid. Spread/SF = (Current Asking Rate) - (Estimated Rate paid). A positive value denotes a favorable dollar differential for the tenant. A negative value denotes an unfavorable dollar differential for the tenant.
Term relating to a type of climate conditioning in a warehouse environment. Produced by a type of equipment that turns air into moist, cool air by saturating it with water vapor. It does not cool air by use of a refrigeration unit. This type of equipment is commonly used in warm, dry climates.
Common in the Phoenix market.
Also known as a tax deferred exchange, the Internal Revenue Code Section 1031 provides that no gain or loss will be recognized (taxed) on the exchange of any type of business use or investment property for any other business use or investment property. Buyers and sellers must work with a qualified intermediary who specializes in section 1031 tax deferred exchanges to insure strict compliance with IRS regulations.
Indicates that a health club or exercise facility is located in the building or in the building park. The facility may be public or for the exclusive use of tenants.
Existing inventory refers to the total square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space that is either planned, under construction or under renovation.
A per square foot dollar amount at which the owner stops covering operating expenses and passes them on to the tenant. Almost always applies to Full Service Gross or Modified Gross office building leases.
The date the tenant's current lease expires.
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