![\"Commercial_Real_Estate_Terms\"](\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2020\/02\/02_LOUNGE.jpg?resize=1024%2C614\")
<\/figure>\n\n\n\nGoogle \u201cleasing an office space\u201d for the first time and you\u2019ll find it\u2019s much more complicated than renting a small coworking space. <\/p>\n\n\n\n
The good news: When you’re familiar with commercial real estate terminology, it\u2019s easier to find the right contract at a comfortable price point.<\/p>\n\n\n\n
These are the 10 most common commercial real estate terms that will keep you in the know\u2014before you sign on the dotted line.<\/p>\n\n\n\n
1. Tenant representative<\/strong><\/h2>\n\n\n\nDon\u2019t start shopping without a tenant representative. A tenant representative is a commercial real estate realtor that works on behalf of the tenant<\/a>. Your tenant representative will get to know your office space needs and make suggestions based on what you want. <\/p>\n\n\n\nOnce you\u2019re ready to review a contract, your tenant representative will negotiate on your behalf with the landlord or landlord representative. Your tenant representative will protect your interests, help you find the right office space, and negotiate the best contract.<\/p>\n\n\n\n
If you don\u2019t have a tenant representative to work on your behalf, you may overlook provisions in the contract that put you at a disadvantage.<\/p>\n\n\n\n
2. Landlord representative<\/strong><\/h2>\n\n\n\nThe landlord representative is the leasing agent that represents the best interest of the landlord. They help the commercial property owner negotiate the highest price point with the lowest possible risks for the landlord.<\/p>\n\n\n\n
During the negotiation process, the landlord representative will secure a rental agreement that outlines deposits, costs, improvement allowances, concessions, and more.<\/p>\n\n\n\n
<\/p>\n\n\n\n
3. Co-broker<\/strong><\/h2>\n\n\n\nSometimes it\u2019s in the landlord\u2019s best interest to sign an exclusive listing agreement with a commercial real estate broker. To rent the property out more quickly, the broker may ask other brokers to show and rent the property and split the commissions.<\/p>\n\n\n\n
When looking to lease a commercial real estate property, ask if the person showing you the property is the agent or a co-broker. <\/p>\n\n\n\n
If they are a co-broker, you know they don\u2019t have a direct connection with the landlord, and therefore, no flexibility to make adjustments to the contract in your favor.<\/p>\n\n\n\n
4. Building classifications<\/strong><\/h2>\n\n\n\nNot every building is created equal. There are Class A, Class B, and Class C buildings. Class A buildings are high-end office spaces in prime locations. Class B buildings are average in nature, with fewer amenities and typically smaller. Class C buildings are older, need repairs, and not in a prime location.<\/p>\n\n\n\n\n\n
What you end up paying for your lease will depend on the classification of the building.<\/a> If you\u2019re interested in a Class A building, but don\u2019t want to pay Class A building price points, looking into WeWork is a great place to start. The WeWork office spaces are well maintained, centrally located, include amenities, and have clear contracts. <\/p>\n\n\n\n5. Usable square footage (USF)<\/strong><\/h2>\n\n\n\nUsable square footage is just as it sounds. It\u2019s the actual space you and your team can occupy<\/a>. Generally, hallways, stairways, bathrooms, storage rooms, etc., are not usable working space. If you lease an entire floor, however, restrooms and hallways are included in your USF. <\/p>\n\n\n\nYou can determine USF by subtracting any shared square footage from the entire floor plan. The resulting number is your USF, and it’s a good indicator of how much actual working space you have.<\/p>\n\n\n\n![\"Top](\"https:\/\/www.wework.com\/ideas\/wp-content\/uploads\/sites\/4\/2020\/02\/20180608-WeWork-Nanjing-Xi-Lu-Common-Areas-Work-Nook-4.jpg?resize=1024%2C683\")
<\/figure>\n\n\n\n6. Common area maintenance (CAM)<\/strong><\/h2>\n\n\n\nMaintenance includes services like repairs, landscaping, cleaning services, snow removal, security, and insurance. Landlords usually include a CAM fee in the contracts of anyone leasing office space in their building. <\/p>\n\n\n\n
Pay close attention to CAM fees<\/a>, so you know what your contract includes. For example, are administrative fees and management salaries included in these fees? CAM fees are a smart way for landlords to get more bang out of your buck. Make sure to negotiate a cap on these fees and that all costs are narrowly defined, so you don\u2019t end up overpaying.<\/p>\n\n\n\n7. Concessions<\/strong><\/h2>\n\n\n\nConcessions are allowances your tenant representative, broker, or lawyer will negotiate for you at the start of your contract or during a renewal. Concessions include things like discounted or free rent for some time, tenant improvement allowances, reduced escalations, and more.<\/p>\n\n\n\n
While concessions are often a sweet part of the contract for tenants, it\u2019s essential to read this clause carefully. The reason? Landlords can include stipulations that revoke your concessions if you default on your lease. <\/p>\n\n\n\n
8. Letter of intent (LOI)<\/strong><\/h2>\n\n\n\nOnce you’ve found the perfect office space and are ready to get started, your letter of intent comes into play.<\/p>\n\n\n\n
An LOI is a written document in which the tenant commits to lease the commercial office space. In the letter of intent, you will summarize the terms of the lease and express your intent to lease. <\/p>\n\n\n\n
It\u2019s in your best interest to sign a nonbinding letter of intent<\/a>, so you\u2019re not formally committed to leasing the property. As always, if the language isn\u2019t precise or if you have questions about what you are signing, have a lawyer review the LOI.<\/p>\n\n\n\n9. Sublease clause<\/strong><\/h2>\n\n\n\n
Once you\u2019re ready to review a contract, your tenant representative will negotiate on your behalf with the landlord or landlord representative. Your tenant representative will protect your interests, help you find the right office space, and negotiate the best contract.<\/p>\n\n\n\n
If you don\u2019t have a tenant representative to work on your behalf, you may overlook provisions in the contract that put you at a disadvantage.<\/p>\n\n\n\n
2. Landlord representative<\/strong><\/h2>\n\n\n\nThe landlord representative is the leasing agent that represents the best interest of the landlord. They help the commercial property owner negotiate the highest price point with the lowest possible risks for the landlord.<\/p>\n\n\n\n
During the negotiation process, the landlord representative will secure a rental agreement that outlines deposits, costs, improvement allowances, concessions, and more.<\/p>\n\n\n\n
<\/p>\n\n\n\n
3. Co-broker<\/strong><\/h2>\n\n\n\nSometimes it\u2019s in the landlord\u2019s best interest to sign an exclusive listing agreement with a commercial real estate broker. To rent the property out more quickly, the broker may ask other brokers to show and rent the property and split the commissions.<\/p>\n\n\n\n
When looking to lease a commercial real estate property, ask if the person showing you the property is the agent or a co-broker. <\/p>\n\n\n\n
If they are a co-broker, you know they don\u2019t have a direct connection with the landlord, and therefore, no flexibility to make adjustments to the contract in your favor.<\/p>\n\n\n\n
4. Building classifications<\/strong><\/h2>\n\n\n\nNot every building is created equal. There are Class A, Class B, and Class C buildings. Class A buildings are high-end office spaces in prime locations. Class B buildings are average in nature, with fewer amenities and typically smaller. Class C buildings are older, need repairs, and not in a prime location.<\/p>\n\n\n\n\n\n
What you end up paying for your lease will depend on the classification of the building.<\/a> If you\u2019re interested in a Class A building, but don\u2019t want to pay Class A building price points, looking into WeWork is a great place to start. The WeWork office spaces are well maintained, centrally located, include amenities, and have clear contracts. <\/p>\n\n\n\n5. Usable square footage (USF)<\/strong><\/h2>\n\n\n\nUsable square footage is just as it sounds. It\u2019s the actual space you and your team can occupy<\/a>. Generally, hallways, stairways, bathrooms, storage rooms, etc., are not usable working space. If you lease an entire floor, however, restrooms and hallways are included in your USF. <\/p>\n\n\n\nYou can determine USF by subtracting any shared square footage from the entire floor plan. The resulting number is your USF, and it’s a good indicator of how much actual working space you have.<\/p>\n\n\n\n<\/figure>\n\n\n\n6. Common area maintenance (CAM)<\/strong><\/h2>\n\n\n\nMaintenance includes services like repairs, landscaping, cleaning services, snow removal, security, and insurance. Landlords usually include a CAM fee in the contracts of anyone leasing office space in their building. <\/p>\n\n\n\n
Pay close attention to CAM fees<\/a>, so you know what your contract includes. For example, are administrative fees and management salaries included in these fees? CAM fees are a smart way for landlords to get more bang out of your buck. Make sure to negotiate a cap on these fees and that all costs are narrowly defined, so you don\u2019t end up overpaying.<\/p>\n\n\n\n7. Concessions<\/strong><\/h2>\n\n\n\nConcessions are allowances your tenant representative, broker, or lawyer will negotiate for you at the start of your contract or during a renewal. Concessions include things like discounted or free rent for some time, tenant improvement allowances, reduced escalations, and more.<\/p>\n\n\n\n
While concessions are often a sweet part of the contract for tenants, it\u2019s essential to read this clause carefully. The reason? Landlords can include stipulations that revoke your concessions if you default on your lease. <\/p>\n\n\n\n
8. Letter of intent (LOI)<\/strong><\/h2>\n\n\n\nOnce you’ve found the perfect office space and are ready to get started, your letter of intent comes into play.<\/p>\n\n\n\n
An LOI is a written document in which the tenant commits to lease the commercial office space. In the letter of intent, you will summarize the terms of the lease and express your intent to lease. <\/p>\n\n\n\n
It\u2019s in your best interest to sign a nonbinding letter of intent<\/a>, so you\u2019re not formally committed to leasing the property. As always, if the language isn\u2019t precise or if you have questions about what you are signing, have a lawyer review the LOI.<\/p>\n\n\n\n9. Sublease clause<\/strong><\/h2>\n\n\n\n
Sometimes it\u2019s in the landlord\u2019s best interest to sign an exclusive listing agreement with a commercial real estate broker. To rent the property out more quickly, the broker may ask other brokers to show and rent the property and split the commissions.<\/p>\n\n\n\n
When looking to lease a commercial real estate property, ask if the person showing you the property is the agent or a co-broker. <\/p>\n\n\n\n
If they are a co-broker, you know they don\u2019t have a direct connection with the landlord, and therefore, no flexibility to make adjustments to the contract in your favor.<\/p>\n\n\n\n
4. Building classifications<\/strong><\/h2>\n\n\n\nNot every building is created equal. There are Class A, Class B, and Class C buildings. Class A buildings are high-end office spaces in prime locations. Class B buildings are average in nature, with fewer amenities and typically smaller. Class C buildings are older, need repairs, and not in a prime location.<\/p>\n\n\n\n\n\n
What you end up paying for your lease will depend on the classification of the building.<\/a> If you\u2019re interested in a Class A building, but don\u2019t want to pay Class A building price points, looking into WeWork is a great place to start. The WeWork office spaces are well maintained, centrally located, include amenities, and have clear contracts. <\/p>\n\n\n\n5. Usable square footage (USF)<\/strong><\/h2>\n\n\n\nUsable square footage is just as it sounds. It\u2019s the actual space you and your team can occupy<\/a>. Generally, hallways, stairways, bathrooms, storage rooms, etc., are not usable working space. If you lease an entire floor, however, restrooms and hallways are included in your USF. <\/p>\n\n\n\nYou can determine USF by subtracting any shared square footage from the entire floor plan. The resulting number is your USF, and it’s a good indicator of how much actual working space you have.<\/p>\n\n\n\n<\/figure>\n\n\n\n6. Common area maintenance (CAM)<\/strong><\/h2>\n\n\n\nMaintenance includes services like repairs, landscaping, cleaning services, snow removal, security, and insurance. Landlords usually include a CAM fee in the contracts of anyone leasing office space in their building. <\/p>\n\n\n\n
Pay close attention to CAM fees<\/a>, so you know what your contract includes. For example, are administrative fees and management salaries included in these fees? CAM fees are a smart way for landlords to get more bang out of your buck. Make sure to negotiate a cap on these fees and that all costs are narrowly defined, so you don\u2019t end up overpaying.<\/p>\n\n\n\n7. Concessions<\/strong><\/h2>\n\n\n\nConcessions are allowances your tenant representative, broker, or lawyer will negotiate for you at the start of your contract or during a renewal. Concessions include things like discounted or free rent for some time, tenant improvement allowances, reduced escalations, and more.<\/p>\n\n\n\n
While concessions are often a sweet part of the contract for tenants, it\u2019s essential to read this clause carefully. The reason? Landlords can include stipulations that revoke your concessions if you default on your lease. <\/p>\n\n\n\n
8. Letter of intent (LOI)<\/strong><\/h2>\n\n\n\nOnce you’ve found the perfect office space and are ready to get started, your letter of intent comes into play.<\/p>\n\n\n\n
An LOI is a written document in which the tenant commits to lease the commercial office space. In the letter of intent, you will summarize the terms of the lease and express your intent to lease. <\/p>\n\n\n\n
It\u2019s in your best interest to sign a nonbinding letter of intent<\/a>, so you\u2019re not formally committed to leasing the property. As always, if the language isn\u2019t precise or if you have questions about what you are signing, have a lawyer review the LOI.<\/p>\n\n\n\n9. Sublease clause<\/strong><\/h2>\n\n\n\n
5. Usable square footage (USF)<\/strong><\/h2>\n\n\n\nUsable square footage is just as it sounds. It\u2019s the actual space you and your team can occupy<\/a>. Generally, hallways, stairways, bathrooms, storage rooms, etc., are not usable working space. If you lease an entire floor, however, restrooms and hallways are included in your USF. <\/p>\n\n\n\nYou can determine USF by subtracting any shared square footage from the entire floor plan. The resulting number is your USF, and it’s a good indicator of how much actual working space you have.<\/p>\n\n\n\n<\/figure>\n\n\n\n6. Common area maintenance (CAM)<\/strong><\/h2>\n\n\n\nMaintenance includes services like repairs, landscaping, cleaning services, snow removal, security, and insurance. Landlords usually include a CAM fee in the contracts of anyone leasing office space in their building. <\/p>\n\n\n\n
Pay close attention to CAM fees<\/a>, so you know what your contract includes. For example, are administrative fees and management salaries included in these fees? CAM fees are a smart way for landlords to get more bang out of your buck. Make sure to negotiate a cap on these fees and that all costs are narrowly defined, so you don\u2019t end up overpaying.<\/p>\n\n\n\n7. Concessions<\/strong><\/h2>\n\n\n\nConcessions are allowances your tenant representative, broker, or lawyer will negotiate for you at the start of your contract or during a renewal. Concessions include things like discounted or free rent for some time, tenant improvement allowances, reduced escalations, and more.<\/p>\n\n\n\n
While concessions are often a sweet part of the contract for tenants, it\u2019s essential to read this clause carefully. The reason? Landlords can include stipulations that revoke your concessions if you default on your lease. <\/p>\n\n\n\n
8. Letter of intent (LOI)<\/strong><\/h2>\n\n\n\nOnce you’ve found the perfect office space and are ready to get started, your letter of intent comes into play.<\/p>\n\n\n\n
An LOI is a written document in which the tenant commits to lease the commercial office space. In the letter of intent, you will summarize the terms of the lease and express your intent to lease. <\/p>\n\n\n\n
It\u2019s in your best interest to sign a nonbinding letter of intent<\/a>, so you\u2019re not formally committed to leasing the property. As always, if the language isn\u2019t precise or if you have questions about what you are signing, have a lawyer review the LOI.<\/p>\n\n\n\n9. Sublease clause<\/strong><\/h2>\n\n\n\n
You can determine USF by subtracting any shared square footage from the entire floor plan. The resulting number is your USF, and it’s a good indicator of how much actual working space you have.<\/p>\n\n\n\n Maintenance includes services like repairs, landscaping, cleaning services, snow removal, security, and insurance. Landlords usually include a CAM fee in the contracts of anyone leasing office space in their building. <\/p>\n\n\n\n Pay close attention to CAM fees<\/a>, so you know what your contract includes. For example, are administrative fees and management salaries included in these fees? CAM fees are a smart way for landlords to get more bang out of your buck. Make sure to negotiate a cap on these fees and that all costs are narrowly defined, so you don\u2019t end up overpaying.<\/p>\n\n\n\n Concessions are allowances your tenant representative, broker, or lawyer will negotiate for you at the start of your contract or during a renewal. Concessions include things like discounted or free rent for some time, tenant improvement allowances, reduced escalations, and more.<\/p>\n\n\n\n While concessions are often a sweet part of the contract for tenants, it\u2019s essential to read this clause carefully. The reason? Landlords can include stipulations that revoke your concessions if you default on your lease. <\/p>\n\n\n\n Once you’ve found the perfect office space and are ready to get started, your letter of intent comes into play.<\/p>\n\n\n\n An LOI is a written document in which the tenant commits to lease the commercial office space. In the letter of intent, you will summarize the terms of the lease and express your intent to lease. <\/p>\n\n\n\n It\u2019s in your best interest to sign a nonbinding letter of intent<\/a>, so you\u2019re not formally committed to leasing the property. As always, if the language isn\u2019t precise or if you have questions about what you are signing, have a lawyer review the LOI.<\/p>\n\n\n\n<\/figure>\n\n\n\n6. Common area maintenance (CAM)<\/strong><\/h2>\n\n\n\n
7. Concessions<\/strong><\/h2>\n\n\n\n
8. Letter of intent (LOI)<\/strong><\/h2>\n\n\n\n
9. Sublease clause<\/strong><\/h2>\n\n\n\n