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Commercial Real Estate Glossary

Improvement Ratio
Stated as a percentage - this is the ratio of the tax assessor's opinion of the assessed value of the improvements divided by the assessed value of the whole property. CoStar does not calculate this ratio - CoStar only reports the ratio provided by the tax assessor in the Comps Product.
In-line Store
A retail outlet placed contiguous to neighboring retailers such that their frontages are in a straight line and behind what is considered the lease line. Tenants operating in the common area are not considered in-line.
Index Lease
A provision in a lease agreement that requires escalations in rent based on a published index, such as LIBOR, T-bills, or a cost of living index such as CPI.
Indoor Air Quality (IAQ)
The quality of air that affects the health and well-being of building occupants.
Industrial Building
A type of building(s) adapted for a combination of uses such as assemblage, processing, and/or manufacturing products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. Self-storage facilities are also tracked as an industrial type, but CoStar does not list such space for lease in the database.

Secondary Types include:

Distribution: These are typically large buildings, both single and multi-tenant, used for the warehousing and distribution of inventory. Buildings are typically 200,000 sf or more, with clear heights 28 feet plus, up to 5% office space and the balance being warehouse/storage space. These buildings typically have one loading door for every 10,0000 sf of RBA and site coverage up to 40%. These buildings are often cross-docked with trailer parking.

Manufacturing: These buildings are typically 300,000 sf or greater with one loading dock for every 15,000 sf of RBA. Office area up to 50%.

Truck Terminal: This facility varies from 25,000 to 150,000 sf and they are typically very narrow (approximately 60' to 80' wide). Site coverage up to 30% with office areas up to 10%. The building is lined along the outside (usually opposite sides) with cross-docks, usually one loading dock for every 3,000 sf of RBA. These buildings are material/freight transfer points for trucking companies or distribution companies like UPS or FedEx.

Service: Industrial zoned building designed for vehicle repair. It may include cranes for moving engine blocks, electric or hydraulic lifts, and numerous drive-in doors.

Warehouses: They are typically 25,000 sf or greater in size, box shape, with one loading dock for every 15,000 sf of RBA. Up to 20% office area with clear heights of 22 feet or greater. Site coverage is typically up to 50%.

Additional Secondary Types include:

Airplane Hangar: A building specifically designed to house aircraft.

Airport: A facility for landing and launching of aircraft, which may include maintenance areas, fuel storage, passenger, and freight terminals. These facilities range from small private runways, to a community airport, and include regional airports.

Auto Salvage Facility: Typically referred to as Junk Yards -- these facilities house cars and trucks primarily for the purpose of selling parts.

Cement/Gravel Plant: A facility that processes and transfers rock materials and may also manufacture cement. Usually located in fenced area with large cranes and belt movers to move the material from place to place.

Chemical/Oil Refinery: A property used for the purpose of processing, refining, and storage of chemicals, oil, and/or petroleum based products.

Contractor Storage Yard: Typically a temporary use for a vacant level lot.

Food Processing: A facility used for processing of food goods. These buildings may or may not have cold storage or freezer space. Typically uses include: bakeries, canneries, frozen foods, and dry foods.

Landfill: a system of trash and garbage disposal in which the waste is buried between layers of earth -- can be used to build up low-lying areas.

Lumberyard: A lumber yard is a retail location for lumber and wood related products used in construction and/or home improvement projects.

Railroad Yard: a system of switches and tracks for storage and maintenance of train cars, and engines. Also used to make up trains.

Refrigeration/Cold Storage: 25,000 sf or greater RBA with one loading dock for every 15,000 sf of RBA. Up to 50% site coverage and office area up to 20%. Must have refrigeration and cross docks.

Self-Storage: Also known as mini storage or public storage facility. These properties may include an onsite manager's apartment unit and office. They may also have open storage spaces for boats, RV's, and other vehicles.

Shipyard: A property used for the purpose of repairing and building ships, yachts, and other watercraft.

Showroom: 25,000 to 150,000 sf with up to 50% site coverage and office areas up to 30%. Clear height from 14 feet and up. A building where merchandise is exhibited for sale or where samples are displayed.

Telecom Hotel: Exclusively used for telecommunications companies to house switching equipment and computers that route/process the communications that go through their lines. Unlike a Data Hosting facility, these "hotels" typically are occupied by many "telcos". The price per square-foot needed to convert or build-out these properties can exceed the range of $100 to $250. These facilities often appear in old downtown office/industrial buildings that were purchased and converted to the new use.

Data Hosting: Also known as Switching Center, Cyber Center, and Web Hosting Facility. A type of building or build-out that is exclusively for the housing of telecommunications equipment for outside companies. Space is generally industrial or flex oriented but has very little need for office space. What it does have are floors that can handle heavy loads, extremely heavy power that can run large amounts of electrical equipment, backup generators, and air conditioners. It may also feature suite amenities such as high speed internet and raised floors, which allow for cooling and the safe storage of cabling.

The building or space must be exclusively used for the hosting/outsourcing of data operations for outside companies. If CoStar's servers were located off-site, they would be in a data center.
Telecom Hotels and Data Hosting Centers share similar characteristics:

• New ones have a footprint of 130,000 to 150,000 square-feet
• Heavy floor loads, usually slabs with tilt-up walls
• 150 to 200 Watts of power per square-foot (residential properties need 5 to 7)
• Raised floors
• Local power grid needs updating to handle drain of electricity (18 to 24
months)
• Backup power sources, either gas or battery
• Proximity to fiber optic lines, very extensive to install, and distance
may causes problems such a cutting across private land, possibility of
accidental cuts or sabotage.

Utility Sub-Station: Typically a facility for the transmission of electricity operated by domestic and international utility companies.

Water Treatment Facility: Industrial facilities for the treatment and filtration of sewage and wastewater.
Industrial Gross Rent
A type of Modified Gross lease where the tenant pays one or more of the expenses in addition to the rent. Exact details must be confirmed for each lease.


See Services
Installment Sale
The disposition of property where at least one payment is to be received after the close of the taxable year in which the disposition occurs.
Insurance Company
In general, an organization chartered to operate as an insurer.
Investment Triple Net
Usually a property that has a strong tenant(s) on a triple net lease. The property is leased to a creditworthy tenant (rated BB or better) with a long-term lease term (10 or more years). The Landlord must be responsible for minimal expenses; general maintenance and upkeep are paid by the tenant. NN leases with new building warranties may qualify for inclusion under this definition. Multi-tenant properties generally do not qualify except where all tenants are noted creditworthy tenants under long-term investment grade leases.

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