Full-service lease
This is a lease where the tenant pays rent that features all the maintenance charges, insurance, taxes and all utilities.
Gross income
The total revenue derived before accounting or deducting any expenses from the total income.
Gross lease
A special feature offered in which the landlord pays all the insurance, maintenance, utilities and tax. The tenant has to pay only the rent.
Gross Leaseable Area (GLA)
The total space which a landlord can provide for rent or lease and through which he receives rent. Spaces such as elevator, staircases and utilities room are excluded.
Gross Rent Multiplier (GRM)
This is the ratio of your purchase price in regard to your total annual revenue.
Limited Liabilities Company (LLC)
A number of investors form a legal entity to own commercial spaces that can be rented or leased.
Letter of Intent/Interest (LOI)
The voluntary offer letter from the buyer that shows his interests in buying commercial space.
Master lease
The seller signs the lease to rent the commercial space. This is more of an assurance in paying the rent.
Mixed Use
Commercial Property and Home Owning exists side-by-side. Normally, the retail and shopping stores function on the ground floors and the first floor and housing is on the upper floors.
NNN lease
The lease in which tenants pay the rent with the property tax, insurance and CAM fees.
Net Operating Income (NOI)
The income that is arrived at after deducting all the expenses such as insurance, property taxes and maintenance charges. This excludes mortgage payment.
Pad
The building in the prime location of a shopping center that attracts a lot of traffic.
Percentage lease
If you are a tenant, you will have to pay some part of your revenue along with the base rent.
Phase I Report
Banks or lenders do an inspection on the factors around the commercial space or property before providing loans. Normally, this will be about the contamination in the soil and the environment. The bank or the lender takes these steps before lending money to the commercial property.
Phase II Report
In this report, soil and groundwater are tested. This is more of an extensive investigation that tests the contamination levels in soil and water around the property.
Proforma income
The potential income when the property is leased hundred percent.
Proforma Cap rate
The potential capitalization rate assuming the property is hundred percent leased.
Reimbursement
The tenants’ share of the insurance, property tax and CAM fees which he has to pay the landlord along with the rent.
SBA Loan
The loan guaranteed by the government for properties which are not rented or when the owner is the occupant of the property.
