Commercial Real Estate Glossary: (A - B)
Absorption
The amount of inventory or units of a specific commercial property type that become occupied during a specified time period (usually a year) in a given market, typically reported as the absorption rate
Annual debt service
The total amount of principal and interest to be paid each year to satisfy the obligations of a loan contract
Annuity
Regular fixed payments or receipts over a designated time period
Assignment
A transfer in which all of the tenant’s leasehold interest in a property goes to another party. Nevertheless, the original tenant remains liable unless released from the future obligations by the owner.
Average annual effective rate
The average annual effective rent divided by the total square feet
Average annual effective rent
The tenant’s total effective rent divided by the lease term
Base rent
The minimum rent due to the landlord. Typically, it is a fixed amount. This is a face, quoted, contract amount of periodic rent. Escalations are calculated from the annual base rate.
Breakpoint
The sales threshold over which percentage rent is due. It is calculated by dividing the annual base rent by the negotiated percentage applied to the tenant's gross sales.
Build-to-suit
A contract in which the owner agrees to develop or finish a property or space to the specifications of the tenant. The tenant may partly carry the cost in the form of increased rent.
Bulk
Industrial space category that describes properties consisting of little more than four walls, a roof, and a floor. They can be very large, average 50,000 square feet.