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Commercial Real Estate Glossary

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Essential commercial real estate (CRE) terms include financial metrics like Net Operating Income (NOI) (income minus expenses), Capitalization Rate (Cap Rate) (return on investment), and Cash-on-Cash Return. Key leasing terms are Base Rent, Common Area Maintenance (CAM) charges, and Triple Net (NNN) leases, where tenants pay taxes, insurance, and maintenance.

Categorized into: Financial & Investment Terms, Leasing & Rent Terms, Property & Market Terms, and Loan & Transaction Terms

Commercial Real Estate Glossary

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1. Obligor

2. Assignment

3. Amortized Mortgage

A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.The Exchange Accommodation Taxpayer 'EAT' is a specially formed LLC used during a Construction Exchange or a Reverse Exchange.

4. Exchange Accommodation Taxpayer

5. Triple Net Lease

A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.A lease requiring tenants to pay all utilities, insurance, taxes, and maintenance costs.An individual who has engaged to perform an obligation to another person (i.e., obligee).

6. Rentable Building Area (RBA)

Expressed in square feet, this area includes the usable area and its associated share of the common areas. Typically rents are based on this area. It is the space the tenant will occupy in addition to the associated common areas of the building such as the lobby, hallways, bathrooms, equipment rooms, etc. There is no real difference between RBA and GLA (Gross Leasable Area) except that GLA is used when referring to retail properties while RBA is used for other commercial properties.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.An individual who has engaged to perform an obligation to another person (i.e., obligee).A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.

7. Gross Floor Area

An individual who has engaged to perform an obligation to another person (i.e., obligee).The area within the perimeter of the outside walls of a building taking into account the number of stories contained in the structure. Space used for interior features, such as stairwells and elevator shafts, is included in the gross floor area.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.

8. Quiet Enjoyment

9. Strip Center

10. Capital Improvement

A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.Any major physical development or redevelopment to a property that extends the life of the property. Examples include upgrading the elevators, replacement of the roof, and renovations of the lobby.An individual who has engaged to perform an obligation to another person (i.e., obligee).

11. Industrial Park

An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.A planned coordinated development of a tract of land with two (2) or more separate industrial buildings that contain a combined total of at least 50,000 square feet of gross floor area and are occupied by not less than five (5) different tenants. Such development is planned, designed, constructed and managed on an integrated and coordinated basis with special attention given to on-site vehicular circulation, parking, utility needs, building design and orientation and open space.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.

12. Long Term Lease

In most markets, this refers to a lease whose term is at least three years from initial signing until the date of expiration or renewal option.An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.

13. A, B, C, D paper

An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.Mortgage loans are rated as A, B, C, or D paper. 'A' paper loans are the highest quality, lowest risk loans; 'B' quality are loans where the borrower has minor credit problems; 'C' quality are borrowers with marginal or poor credit; 'D' quality indicates very high risk loans.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.

14. Distraint

A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.The act of seizing (legally or illegally) personal property based on the right and interest which a landlord has in the property of a tenant in default.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.An individual who has engaged to perform an obligation to another person (i.e., obligee).

15. Hybrid REIT

16. 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.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.

17. Operating Expense Escalation

An individual who has engaged to perform an obligation to another person (i.e., obligee).Although there are many variations of operating expense escalation clauses, all are intended to adjust rents by reference to external standards such as published indexes, negotiated wage levels, or expenses related to the ownership and operation of buildings.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.

18. Capitalized Earning Approach

This method refers to the return on the investment that is expected by an investor.An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.

19. Conveyance

20. Federal Acquisition Regulation (FAR)

The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.The body of regulations which is the primary source of authority governing the government procurement process. The FAR, which is published as Chapter 1 of Title 48 of the Code of Federal Regulations, is prepared, issued, and maintained under the joint auspices of the Secretary of Defense, the Administrator of General Services Administration, and the Administrator of the National Aeronautics and Space Administration. Actual responsibility for maintenance and revision of the FAR is vested jointly in the Defense Acquisition Regulatory Council (DARC) and the Civilian Agency Acquisition Council (CAAC).A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.An individual who has engaged to perform an obligation to another person (i.e., obligee).

21. Real Estate Exchange

A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.An individual who has engaged to perform an obligation to another person (i.e., obligee).A type of Exchange of real property for real property. All types of real property are 'like kind' for other real property, including vacant land, residential, commercial, and even some long term leases.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.

22. Equity Market Cap

A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.An individual who has engaged to perform an obligation to another person (i.e., obligee).The market value of all outstanding common stock of a company.

23. Surface Rights

A right or easement granted with mineral rights, enabling the possessor of the mineral rights to drill or mine through the surface.An individual who has engaged to perform an obligation to another person (i.e., obligee).A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.

24. Lot

A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.Generally, one of several contiguous parcels of land making up a fractional part or subdivision of a block, the boundaries of which are shown on recorded maps and 'plats'.An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.

25. Setback

The distance from a curb, property line or other reference point, within which building is prohibited.A mortgage loan in which the principal, as well as the interest, is payable in monthly or periodic installments during the term of the loan.An individual who has engaged to perform an obligation to another person (i.e., obligee).The transfer in writing of an interest in a lease, mortgage or other instrument. The assignor, or lessee, transfers the entire remainder of the term created by the lease, and the assignee becomes liable to the original lessor for rent. Assignor may or may not retain secondary liability for performance under the lease, depending upon the terms of the lease pertaining to assignment.

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25 Questions

❤ If you liked Fatskills, consider supporting us by checking out The Life Manuals You Never Got.

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All trademarks, logos and brand names are the property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, trademarks and brands does not imply endorsement.

About | Explore | User Guide | Topics | Subjects | Doubt Solver | Career Aptitude Test | Answers | Free Tools | OSHA Basics Quiz | What Should We Know?
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Without work one finishes nothing. - Ralph Waldo Emerson
© 2026 Fatskills.com