Real Estate Glossary

The price a property brings in a given market. Commonly used interchangeably with market value, although not tru1y the same. See Also: Market Value

The rental income that a property would most probably command on the open market: indicated by current rents paid and asked for comparable space as of the date of the appraisal. See also "Economic Rent"

A forecast of future demand for a type of project along with recommendations as to quantity to be sold or leased and prices to be charged. Also called "Marketability Study."

The most probable price which property should bring a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (ii) both parties are well informed or well advised, and acting in what they consider their own best interests; (iii) a reasonable time is allowed for exposure in the open market; (iv) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (v) the price represents the normal consideration for the property sold unaffected by special or creative financial or sales concessions granted by anyone associated with the sale.

Title to real property that can be readily marketed (i.e., sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.

A primary lease that controls subsequent leases and which may cover more property than subsequent leases.

(1) A zoning plan for an entire governmental subdivision, (e.g., a city). A comprehensive plan to allow a city to grow in an orderly manner, both economically and ecologically. (ii) A developer's plan for a multi-phase office park or mixed-use development that takes into account all proposed or projected uses, improvements and amenities.

A claim created by state statutes for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as to the improvements.

The boundary lines of land described in accordance with their terminal points and angles. Originally metes referred to distance and bounds referred to direction. Today the words have no individual meaning of practical significance.

Space within a building or project provided for more than one use (e.g., an apartment building with office space, a hotel with office space, or a retail establishment with apartments).

The instrument that evidences an interest in real estate and created to provide a pledge as security for the performance or repayment of a loan. The borrower (i.e., mortgagor) retains possession and use of the property.

The party that lends the money and receives the mortgage.

The party that burrows the money and gives the mortgage on the property.

Net Absorption is the net change in physically occupied space between the current measurement period and the last measurement period taking into consideration office space vacated and newly constructed office space in the same area during the same period. See also: "Gross Absorption". Net absorption can be either positive or negative. Pre-leasing activity is NOT included in net absorption calculations because pre-leasing does not involve any change in occupancy. Net absorption is calculated when the pre-leasing tenant moves into its new space (positive absorption) and vacates its former space (negative absorption). The calculation of net absorption includes transactions that occur in sublease space as well as direct lease space.

A lease in which the tenant pays, in addition to rent, certain costs associated with a leased property, including property taxes, insurance premiums, repairs, utilities, and maintenance. There are also "net-net" (double net) and "net-net-net" (triple net) leases, depending upon the degree to which the tenant is responsible for operating costs. See Also: Gross Lease