Ch. 30 - Commercial Leases

Question 1

The difference between the rentable and use­able square footage in a building.

Answer 1

loss factor

Question 2

A _____ lease is defined as one in which the owner pays all of the operating expenses and the tenant has no responsibility for these expenses.

Answer 2

Gross lease

Question 3

A _____ lease is defined as one in which the tenants pay the operating expenses.

Answer 3

net lease

Question 4

This option gives the tenant the right at the end of the lease term to renew the lease of the same space at the current market rate, before it’s offered to other tenants.

Answer 4

right of first refusal

Question 5

A _______ is a document designed to give a third party critical information on the relationship between an owner and his or her tenants.

Answer 5

Estoppel certificate

Question 6

Which lease clause would address the issue of a tenant needing to make changes to the leased space?

Answer 6

Improvements and Alterations clause

Question 7

An indexed escalation formula based on the contract entered into every three years between the local building services union and a coalition of New York building owners. The formula provides that the rent will increase a specific amount per square foot based on a specified increase in a porter’s hourly wage.

Answer 7

Porter’s Wage Escalation Formula