Lesson 3 Flashcards
Escalator
Enables the landlord to increase the rent payable during the term by the same amount as the increase in the cost of the items covered by the escalation clause
Lease
A contract in which the rights to use and occupy land, space, or structures are transferred by the owner to another for a specified period of time in return for a specified rent
Fee simple interest
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, expropriation, police power, and escheat
Leased fee interest
The ownership interest held by the lessor, which includes the right to the contract rent specified in the lease plus the reversionary right when the lease expires
Leasehold interest
The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease
Rent / contract rent
Rent is defined as an amount paid for the use of land, improvements, or a capital good
Contract rent is the actual rental income specified in a lease
Flat rental lease
Rent remains constant throughout the term of the lease
Step-up or step-down rental lease
Also referred to graduated or escalating. The provide for specified changes in the amount of rent at one or more points during the lease term.
Variable rental lease
Sometimes called index leases. These leases can be quite complex and are usually long term. They provide for periodic adjustments based on a change in a specific economic index, such as the Consumer Price Index
Revaluation lease
This form of lease provides for rent reviews at specific points during the lease term.
Percentage lease
Some or all of the rent charged is based on a specified percentage of the volume of business, productivity, or use achieved by the tenant
BOMA Metropolitan Building Class A
Most prestigious building competing for premier office users with rents above average for the area. Buildings have high-quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
BOMA Metropolitan Building Class B
Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price.
BOMA Metropolitan Building Class C
Buildings competing for tenants requiring functional space at rents below the average for the area.
Gross lease
Tenant pays rent and landlord pays expenses
