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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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Sale-Leaseback:
An arrangement by which the owner occupant of a
property agrees to sell all or part of the
property to an investor and then lease it back
and continue to occupy space as a tenant.
Although the lease technically follows the sale,
both will have been agreed to as part of the
same transaction. |
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Second Mortgage:
A mortgage on property that ranks below a first
mortgage in priority. Properties may have two,
three, or more mortgages, deeds of trust, or
land contracts as liens at the same time. Legal
sequence priority, indicated by the date of
recording, determines the designation first,
second, third, etc. |
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Second Generation or
Secondary Space:
Refers to previously occupied space that becomes
available for lease, either directly from the
landlord or as sublease space. |
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Security Deposit:
A deposit of money by a tenant to a landlord to
secure performance of a lease. This deposit can
also take the form of a
Letter of Credit or other financial
instrument. |
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Seisen (Seizen):
Possession of real property under claim of
freehold estate. This term originally referred
to the completion of feudal investiture by which
a tenant was admitted into the feud and
performed the rights of homage and fealty.
Presently it has come to mean possession under a
legal right (usually a fee interest). As the old
doctrine of corporeal investiture is no longer
in force, the delivery of a deed gives seisin in
law. |
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Setback:
The distance from a curb, property line or other
reference point, within which building is
prohibited. |
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Setback Ordinance:
Setback requirements are normally provided for
by ordinances or building codes. Provisions of a
zoning ordinance regulate the distance from the
lot line to the point where improvements may be
constructed. |
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Shell Space:
The interior condition of the tenant's
usable square footage when it is
without improvements or finishes. While existing
improvements and finishes can be removed, thus
returning space in an older building to its
"shell" condition, the term most commonly refers
to the condition of the usable square footage
after completion of the building's "shell"
construction but prior to the build out of the
tenant's space. Shell construction typically
denotes the floor, windows, walls and roof of an
enclosed premises and may include some HVAC,
electrical or plumbing improvements but not
demising walls or interior space partitioning.
In a new multi-tenant building, the common area
improvements, such as lobbies, restrooms and
exit corridors may also be included in the shell
construction. With a newly constructed office
building, there will often be a distinction
between improvements above and below the ceiling
grid. In a retail project, all or a portion of
the floor slab is often installed along with the
tenant improvements so as to better accommodate
tenant specific under-floor plumbing
requirements. |
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Site Analysis:
The study of a specific parcel of land which
takes into account the surrounding area and is
meant to determine its suitability for a
specific use or purpose. |
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Site Development:
The installation of all necessary improvements,
(i.e. installment of utilities, grading, etc.),
made to a site before a building or project can
be constructed upon such site. |
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Site Plan:
A detailed plan which depicts the location of
improvements on a parcel of land which also
contains all the information required by the
zoning ordinance. |
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Slab:
The exposed wearing surface laid over the
structural support beams of a building to form
the floor(s) of the building or laid
slab-on-grade in the case of a non-structural,
ground level concrete slab. |
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Soft Cost:
That portion of an equity investment other than
the actual cost of the improvements themselves
(i.e. architectural and engineering fees,
commissions, etc.) and which may be
tax-deductible in the first year. |
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Space Plan:
A graphic representation of a tenant’s space
requirements, showing wall and door locations,
room sizes, and sometimes includes furniture
layouts. A preliminary space plan will be
prepared for a prospective tenant at any number
of different properties and this serves as a
“test-fit” to help the tenant determine which
property will best meet its requirements. When
the tenant has selected a building of choice, a
final space plan is prepared which speaks to all
of the landlord and tenant objectives and then
approved by both parties. It must be
sufficiently detailed to allow an accurate
estimate of the construction costs. This final
space plan will often become an exhibit to any
lease negotiated between the parties. |
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Special Assessment:
Any special charge levied against real property
for public improvements (e.g., sidewalks,
streets, water and sewer, etc.) that benefit the
assessed property. |
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Specific Performance:
A requirement compelling one of the parties to
perform or carry out the provisions of a
contract into which he has entered. |
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Speculative Space:
Any tenant space that has not been leased before
the start of construction on a new building. |
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Step-Up Lease (Graded
Lease):
A lease specifying set increases in rent at set
intervals during the term of the lease. |
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Straight Lease (Flat
Lease):
A lease specifying the same, a fixed amount, of
rent that is to be paid periodically during the
entire term of the lease. This is typically paid
out in monthly installments. |
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Strip Center:
Any shopping area, generally with common
parking, comprised of a row of stores but
smaller than the neighborhood center anchored by
a grocery store. |
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Subcontractor:
A contractor working under and being paid by the
general
contractor. Often a specialist in nature,
such as an electrical contractor, cement
contractor, etc. |
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Subdivision Plat:
A detailed drawing which depicts the manner in
which a parcel of land has been divided into two
or more lots. It contains engineering
considerations and other information required by
the local authority. |
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Subordination Agreement:
As used in a lease, the tenant generally accepts
the leased premises subject to any recorded
mortgage or deed of trust lien and all existing
recorded restrictions, and the landlord is often
given the power to subordinate the tenant's
interest to any first mortgage or deed of trust
lien subsequently placed upon the leased
premises. |
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Surety:
One who at the request of another, and for the
purpose of securing to him a benefit,
voluntarily binds himself to be obligated for
the debt or obligation of another. Although the
term includes
guarantor and the terms are commonly,
though mistakenly, used interchangeably, surety
differs from guarantor in a variety of respects |
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Surface Rights:
A right or easement granted with mineral rights,
enabling the possessor of the mineral rights to
drill or mine through the surface. |
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Survey:
The process by which a parcel of land is
measured and its boundaries and contents
ascertained. |
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