Don't know your "absorption rates" from your "cap rates"? Do you confuse your COO with your COT? We can help!
Commercial Property Guide have identified and defined a selection of the most widely used phrases in the commercial property landscape, from print ads to online, sales conversations and contract terms, all in an aid of you getting the most out of searching for and securing commercial property. Don’t forget to bookmark this page to refer back to when you need to later.
Absorption rate
An estimate or forecast of expected annual sales or lease of a particular property.
Access.
Accessory or a secondary building on a lot that is not considered to be the primary building, e.g. parking space, shed, storage locker. Usually described as an 'Accessory Building' or 'Accessory Unit'.
APR (Annual Percentage Rate)
The cost of credit to the lender, expressed as a simple percentage.
Appraisal
The classification of a property according to its worth.
Approx.
Approximately or approximate. This may be used to describe the approximate land size, building floor size or outgoings expected.
Assignment
The transfer of a claim, right, interest or property from one company/individual to another.
Building Efficiency Ratio
The relationship between the net leasable area as compared to the gross leasable area.
Buyers Agent
An agent hired by a prospective purchaser to find a suitable property for purchase. An agent represents the buyer and negotiates with the seller or the seller's agent for the sale of the real estate acting in the purchaser's best interest.
Cap Rate (Capitalisation Rate)
The rate of return on a real estate investment property based on the expected income that the property will generate. Typically this will be an appropriate risk free return plus a premium to reflect the risk of that specific investment.
COO (Certificate of Occupancy)
A certificate provided to the developer from the local government permitting the structure to be occupied. The building is in compliance with public health and all building codes.
COT (Certificate of Title)
A written statement by an attorney or title company as to the status of a property title.
Clear Title
A title that is free of liens and legal questions as to the ownership of the property, a requirement for the sale of real estate, also known as just title, good title or free and clear.
CMA (Comparative Market Analysis)
Analysis completed by a real estate agent to assess a property value, done by examining similar properties that have sold within the pas year. This may be done for both buyers and sellers.
Cooling Off Period
A period of time during which the purchaser may cancel a purchase of a property. A period of 5 days allows the purchaser to make any necessary inquiries about the property, arrange finance or simply a change of mind.
Conjunctional Agent
An agent who is jointly working with an existing agent, who finds a buyer or tenant for a property, initiates a negotiation and shares in a commission.
Covenant
A clause in a contract that requires one party to do, or refrain from doing, certain things. Often a restriction on a borrower imposed by a lender. For example, they could restrict how the property can be used or what can be built on the property.
DCP ( Development Control Plan)
A plan that contains detailed planning and design guidelines for a new development that needs to be considered in preparing a development application.
Environment Impact Statement
A detailed assessment of the effect of all aspects of a development on the environment in which the development will occur.
Fixtures
A part of a piece of property that is permanently attached so that to move or remove it would damage the property, it therefore becomes part of the property and the consequent sale.
Gross Lease
A lease that obligates the lessor to pay all or part of the expenses of the leased property, such as taxes, insurance, maintenance, utilities, etc.
Guarantees
This is where the owner(s) of a business agree to meet the terms of a lease. This means that if a business fails, the guarantor(s) are liable for costs and terms outlined in the lease agreement.
Lease Options
A financing option that provides for homebuyers to lease a home with an option to buy, with part of he rental payments being applied toward the down payment.
Listing Agent
The real estate agent responsible for the listing of a property and who is to represent the interest of the seller or lessor (vendor).
Market Value
The price a property should get in a competitive and open market. Generally determined during a market appraisal.
Net lease
A property lease in which the lessee agrees to pay all expenses normally associated with ownership, such as utilities, repairs, insurance and taxes.
OC (Owners Corporation)
An administrative body of the property made up of owners of the properties or apartments of strata titled buildings. The owners select a committee to run the admin and upkeep of the site and its surrounds. In the past, known also as Body Corporate.
p.a (per annum or per year)
Used to describe the amount of rent that the landlord expects to charge for the property. This amount does not include outgoings and for commercial real estate it generally excludes GST.
Security Deposit
Money paid in advance of a transaction, typically with a broker.
SMSF (Self-Managed Super Fund)
A method of finance available to buyers with superannuation funds available for investing.
sqm (Square meters)
Listing the square meter area of the property, land or warehouse space.
Strata Title
Part of a building which is subdivided into common property with full ownership.
STCA (Subject To Council Approval)
When a property lists "Suits a variety of development opportunities (STCA)" this states that developments may only be available at the consideration and approval of the local council.
Sublease
A lease that is given by a tenant to another party for part or all of the leased premises. The original tenant is not the sub-lessor.
Tenancy in common
A type of joint tenancy of property without right of survivorship, each tenant portion of ownership is distributable under will.
TI (Tenancy improvements)
Improvements made to the leased premises by or for a tenant.
Vendor
The person who owns a particular property and is trying to sell it on or lease it out.
Yr (Year)
Typically used to describe the amount of years the lease is available for, e.g. 3yr lease.
Yr +
Typically used to describe the amount of years the lease is available for PLUS options. e.g. 3yr + 3yr: 3 years with the option to extend the lease for a further 3 years.