It is really important to understand the real estate terminology as it helps an individual to know more about the properties. If you want to understand real estate development, you need to know the key terms used to describe properties whether you’re developing the properties from the ground up or acquiring and renovating them.
- Real Estate Broker –A real estate broker or real estate agent is a person who acts as an intermediary between sellers and buyers of real estate/real property and attempts to find sellers who wish to sell and buyers who wish to buy.
- Common Area Maintenance (CAM) – This is the amount of additional rent charged to the tenant to maintain the common areas of the property shared by tenants. Typical examples include such work as landscaping, snow removal, exterior lighting, as well as insurance and property tax.
- Usable Square Footage –USF is how much actual space you will be able to use. Rentable square feet is how much space you’re paying for, including shared common areas. The measurement called a load factor is the difference between RSF and USF, expressed as a percentage of USF
- Escalation Clause – A clause in a lease which allows the landlord to increase the rent in the future to reflect changes in expenses paid by the landlord, such as real estate taxes, operating costs, etc. This can take three forms: 1) fixed periodic increases, 2) adjustments based on the Consumer Price Index (cost-of-living increases), and/or 3) an increase tied to the increased costs of operating the property.
- Tenant Improvements –The real estate definition of Leasehold improvements, also known as tenant improvements (TI), are the customized alterations a building owner makes to rental space as part of a lease agreement, in order to configure the space for the needs of that particular tenant.
- Full Service Rent – This refers to an “all-inclusive” rent that includes operating expenses and real estate taxes for the first year. The tenant is generally still responsible for any increase in operating expenses over the base year amount.
