Property of Retail Leasing Advisors, LLC
No warranty or representation, express or imp lied, has been made as to the accuracy of the information provided
herein, and no liability is assumed for errors or omissions.
Retail Leasing: Commonly Used Definitions
Prepared by Retail Leasing Advisors, LLC
Base Rent Multiplying the square footage by the base rent amount, then dividing
by twelve months calculates the monthly rental obligation. Operating
expenses are in addition to base rent.
Common Area Area of a property that is used by all owners or tenants. Examples of
common areas are sidewalks, parking lots, landscaping, access points.
Fixtures In real estate, a part of a piece of property that is permanently
attached so that to move or remove it would damage the property.
The fixture is considered a part of the property if it shares the same
useful life as the rest of the property.
Guarantor The personal guarantor is obligated to pay the balance owed to the
Landlord in the event of default or non-payment by the tenant.
Lease
Commencement
The lease commencement date is the date on which the lessee takes
possession of the property and begins to use it.
Operating Expenses Includes Common Area Maintenance (CAM), insurance and taxes for
the shopping center. CAM are expenses incurred by the Landlord to
maintain the buildings common areas, including but not limited to,
lighting, landscaping, parking lots, etc. Insurance and taxes are for the
shopping center only. NNN charges are calculated in the same
manner as base rent, and are an estimated amount, which are
reconciled annually. Commonly referred to as prorata charges, CTI or
NNN.
Percentage Rent
A percentage rent clause typically has a tenant pay a percentage of
its gross sales, either over and above an agreed-upon breakpoint, or
after deduction of minimum rent and other expenses such as real
estate taxes.
Prepaid Rent First month's full rental payment is due upon execution of the Lease.
Amount includes base rent and operating expenses.
Proposal to Lease List of basic components, economic and legal, of a deal which
Landlord and tenant execute to confirm their understanding and
agreement of initial terms. Once agreed upon, it becomes the basis for
the lease.
Renewal Option A provision that covers the tenant’s rights to extend the lease past the
current end of term. A specific date is noted as a deadline to exercise
this option. The deadline is commonly referred to an option notification
deadline.
Rental Abatement A specified period during which tenant is only responsible for NNN
charges. Commonly referred to as free rent.
