How to use this reference
Commercial terms can change meaning with the lease, purchase agreement, measurement standard, property type and local rules. Use this glossary to identify the right question, then verify the applicable document and obtain advice for the transaction.
Editorial method →Amounts a tenant pays in addition to base rent under the lease. Recoveries may include property taxes, building insurance, common-area costs, utilities, management charges or other specifically defined expenses.
The lease—not the label—determines which costs are recoverable, how the tenant's share is calculated and how estimates are reconciled.
The minimum rent payable for the premises before additional rent and separately billed charges. Commercial base rent is often quoted as dollars per square foot per year.
Confirm the area used for billing, the time unit, scheduled increases and any free-rent period before comparing proposals.
A measured area of a building reported under a stated measurement convention. Gross, rentable and usable areas can produce different figures for the same property.
Ask which standard, drawing set and measurement date support a quoted area. Do not assume two listing records use the same basis.
A ratio calculated by dividing a property's annual net operating income by its price or value. It is commonly expressed as a percentage.
A cap rate is one unlevered income measure. It does not independently capture future growth, capital requirements, financing, lease rollover or total return.
The usable vertical distance between the finished floor and the lowest overhead obstruction in an industrial or warehouse space.
Verify where and how the measurement was taken. Beams, sprinklers, lighting, mechanical systems and mezzanines can affect usable clearance.
An opportunity whose address, financial information, tenant details or other material facts are withheld from public marketing and released through a controlled process.
Access may require buyer qualification, proof of capacity, confidentiality terms or an NDA. Confidentiality does not remove disclosure or professional obligations.
A loading position designed so a truck trailer can align with an elevated building opening or dock platform for material transfer.
Count alone is not enough. Confirm door dimensions, dock equipment, manoeuvring depth, access, trailer parking and operating restrictions.
The structured investigation used to test legal, physical, environmental, financial, tenancy and operational assumptions before a transaction becomes unconditional.
The work plan should be property-specific and should coordinate document delivery, site access, specialist reports, conditions and deadlines.
Potential property income adjusted for vacancy and credit loss, plus other recurring property income used in the analysis.
Reconcile assumptions to leases, occupancy, payment history and the period being analyzed before using the figure to calculate NOI.
A professional investigation of current and historical site conditions and potential environmental concerns. The scope can progress from records and site-history work to intrusive testing when conditions warrant it.
Public records are useful inputs but are not a substitute for advice from a qualified environmental professional.
A lease structure in which the landlord includes some or most property operating costs within the stated rent, subject to the lease's exclusions and adjustment provisions.
Gross does not necessarily mean all-inclusive. Review utilities, cleaning, after-hours services, tax increases and operating-cost escalation language.
A municipal classification that establishes the uses and development rules applying to a parcel under the local land-use bylaw.
A listed use may be permitted, discretionary or subject to conditions. Verify the current parcel designation and approval pathway with the municipality.
A benefit offered in connection with a lease, such as a rent-free period, rent reduction, cash contribution or landlord-funded improvements.
Compare the economic value, payment timing, conditions, ownership of improvements and tax treatment—not just the headline amount.
A lease structure that separates base rent from some or all property taxes, insurance, maintenance and operating expenses payable or reimbursable by the tenant.
Net-lease terminology varies. The recovery clauses, exclusions, administration charges and reconciliation rights control the actual obligation.
Property-level effective gross income less the operating expenses used in the analysis, calculated before financing costs, income tax and depreciation.
There is no substitute for reviewing the underlying rent roll, leases and statements. Treatment of reserves, owner-specific costs and capital items should be stated.
The total cost of occupying commercial premises over a stated period. It can include base rent, additional rent, utilities, taxes, services, fit-up and other business-specific costs.
Normalize every alternative to the same area, time period and included-cost basis before comparing locations.
A unit metric calculated by dividing a sale price or other stated amount by a stated property area.
The result is only comparable when property type, location, condition, income profile and area measurement basis are understood.
The area used to calculate rent under the applicable lease or measurement standard. It may include an allocation of shared building areas in addition to the tenant's occupied space.
Request the measurement standard and calculation. BOMA maintains different standards for office, industrial, retail and other property types.
A transaction in which an owner sells a property and simultaneously leases some or all of it back from the purchaser.
The sale value and lease economics are connected. Analyze term, rent, security, renewal rights, operating obligations and credit together.
A landlord contribution toward agreed design, construction or fit-up costs for leased premises, governed by the lease or a separate work agreement.
Confirm eligible costs, payment conditions, approval rights, ownership, unused amounts and restoration obligations.
A commonly used label for a net lease in which the tenant bears defined property tax, insurance and maintenance or operating-cost obligations in addition to base rent.
The phrase is shorthand, not a complete allocation of risk. Read the lease for structural, capital, management and reconciliation provisions.
The area available for an occupant's exclusive use under the stated measurement convention, generally excluding some shared building areas.
Usable and rentable area are not interchangeable. The difference affects density, cost per workstation and effective rent.
An allowance for income not collected because space is vacant, tenants do not pay, or contractual income is otherwise unrealized during the analysis period.
Support the assumption with the property's occupancy, lease expiry schedule, arrears and relevant market evidence.
A common term for the municipal land-use rules that regulate how a parcel and its buildings may be used and developed.
Verify the current bylaw, district, overlays, approvals and non-conforming conditions. A listing description is not municipal confirmation of use.
Reference Standard
Definitions are editorial summaries, not quotations or substitutes for legal documents. Measurement, tax, environmental and municipal terms should be checked against the current governing source.
BOMA floor measurement standards ↗CRA commercial real property guidance ↗Alberta remediation and ESA guidance ↗Calgary Land Use Bylaw ↗