Commercial Real Estate Glossary: (E-H)
Effective Rental Income
The resulting income a property produces after estimaed vacancy and credit losses have been deducted from potential rental income
Efficiency Percentage
The relationship of useable area to rentable area on a given property. It is calculated by dividing useable square feet by rentable square feet.
Expense Stop
The level (or maximum amount) up to which the landlord will pay certain operating expenses. Amounts above the expense stop are the tenant's responsibility
Fashion/Specialty Center
Composed mainly of upscale apparel shops, boutiques, and craft shops carrying selected fashion or unique merchandise of high quality and price. The physical design of these centers are sophisticated emphasizing a rich decor and high-quality landscaping. These centers usually are in trade areas having high-income levels.
Fixed Lease
A lease in which the lessee pays a fixed rental amount for the duration of the lease
Freestanding
A term used to describe industrial and commercial properties. The property type often is developed in an industrial park setting or as a build-to-suit on a selected piece of property. Freestanding properties usually are designed for manufacturing, distribution, assembly, packaging and similar uses. In commercial establishments providing goods and services in single and multiple-use buildings of various sizes, the larger, newer freestanding stores are also referred to as big boxes.
Fully amortized mortgage loan
A method of loan amortization in which equal periodic payments completely repay the loan
Future Value
The amount to which money grows over a designated period of time at a specified interest rate
Gross Leasable Area (GLA)
The total floor area designed for tenant occupancy and exclusive use, including basements, mezzanines, and upper floors, is measured from the center line of joint partitions and from outside wall faces. GLA is that area on which a tenant pays rent and is the area that produces income
Gross Lease
A lease in which the landlord pays all expenses associated with owning and operating the property. This is in contract to a net lease.
Gross Operating Income (GOI)
The total income generated by property operations before payment of operating expenses. It is calculated from the potential rental income, less vacancy and collections, plus other income not affected by vacancy.
Ground Lease
A lease of the land only and usually for a relatively long period of time. The tenant builds the building on the leases property but owns only the improved property and not the land that it sits on.
High Rise
An office building that the Building Owners and Managers Association defines as greater than 25 stories above ground