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Glossary of Real Estate Terms
This Glossary has
been provided as a courtesy to assist you in
gathering information relative to real estate.
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Raw Land:
Unimproved land that remains in its natural
state. |
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Raw Space:
Unimproved "shell
space" in a building. |
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REO (Real Estate Owned):
Real estate that has come to be owned by a
lender, including real estate taken to satisfy a
debt. Includes real estate acquired by lenders
through
foreclosure or, in settlement of some
other obligation. |
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Real Estate Journal Online:
The Wall Street Journal’s online real estate
news and information portal. |
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Real Property:
Land, and generally whatever is erected or
affixed to the land, such as buildings, fences,
and including light fixtures, plumbing and
heating fixtures, or other items which would be
personal property if not attached. |
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Recapture:
(1) When the IRS recovers the tax benefit of a
deduction or a credit previously taken by a
taxpayer, which is often a factor in foreclosure
since there is a forgiveness of debt. (2) As
used in leases, a clause giving the lessor a
percentage of profits above a fixed amount of
rent; or in a percentage lease, a clause
granting the landlord a right to terminate the
lease if the tenant fails to realize minimum
sales. |
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Recourse:
The right of a lender, in the event of a default
by the borrower, to recover against the personal
assets of a party who is secondarily liable for
the debt (e.g. endorser or guarantor). |
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Rehab:
An extensive renovation of a building or project
which is intended to cure obsolescence of such
building or project. |
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Renewal Option:
A clause giving a tenant the right to extend the
term of a lease, usually for a stated period of
time and at a rent amount as provided for in the
option language. |
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Rent:
Compensation or fee paid, usually periodically
(i.e. monthly rent payments, for the occupancy
and use of any rental property, land, buildings,
equipment, etc. |
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Rent Commencement Date:
The date on which a tenant begins paying rent.
The dynamics of a marketplace will dictate
whether this date coincides with the lease
commencement date or if it commences months
later (i.e., in a weak market, the tenant may be
granted several months free rent). It will never
begin before the lease commencement date. |
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Rentable Square Footage:
Rentable Square
Footage equals the Usable Square Footage plus
the tenant’s pro rata share of the Building
Common Areas, such as lobbies, public corridors
and restrooms. The pro-rata share, often
referred to as the Rentable/Usable (R/U) Factor,
will typically fall in a range of 1.10 to 1.16,
depending on the particular building. Typically,
a full floor occupancy will have an R/U Factor
of 1.10 while a partial floor occupancy will
have an R/U Factor of 1.12 to 1.16 times the
Usable Area. |
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Rentable/Usable Ratio:
That number obtained when the Total Rentable
Area in a building is divided by the Usable Area
in the building. The inverse of this ratio
describes the proportion of space that an
occupant can expect to actually
utilize/physically occupy. |
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Rental Concession:
Concessions a landlord may offer a tenant in
order to secure their tenancy. While rental
abatement is one form of a concession, there are
many others such as: increased tenant
improvement allowance, signage, lower than
market rental rates and moving allowances are
only a few of the many. |
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Rent-Up Period:
That period of time, following construction of a
new building, when tenants are actively being
sought and the project is approaching its
stabilized occupancy. |
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Representation Agreement:
An agreement between the owner of a property and
a real estate broker giving the broker the
authorization to attempt to sell or lease the
property at a certain price and terms in return
for a commission, set fee or other form of
compensation. |
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Request for Proposal (“RFP”):
The formalized Request for Proposal represents a
compilation of the many considerations that a
tenant might have and should be customized to
reflect their specific needs. Just as the
building’s standard form lease document
represents the landlord’s “wish list”, the RFP
serves in that same capacity for the tenant. |
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