Real Estate Property Management Terms And Services

Whether you are looking for a suitable tenant for your commercial property or a company that will manage the property on your behalf. A rental property management company is your best bet. Although the company will help you throughout the procedure, you need to do a little homework before contacting one. The first step is by getting yourself acquainted with commercial real estate terms. It will help you understand the procedure better and also ask questions if any.

Below are 7 CRE terms you should know before giving your commercial property on lease:

Common area maintenance (CAM)

This is the additional rent charged to a tenant for maintenance of the common areas of that particular property. Mainly because it is shared by two or more tenants, examples include exterior lightening, snow removal, etc.

Usable area

This is the area which is exclusively used by the tenant. In simpler terms, the floor or area of a building that can be occupied and utilized.

Rentable area

It combines the usable area plus portion of the common areas shared by other occupants. This includes, restrooms, lobbies, corridors, etc.

Non-compete clause

Under this clause the landlord cannot lease any other premises of the same property to a direct competitor or a tenant with similar business as yours.

Tenant improvements

Any improvements made on the interior of the property by or for the tenant is defined as tenant improvements. The costs for the same is either paid by the tenant or the landlord, depending on the agreement. Sometimes agreements specify a certain amount up to which the landlord will contribute money, any costs above this amount has to be paid by the tenant.

Letter of intent

An informal contract between the landlord and the tenant which indicates their intent to move ahead with negotiations.

Escalation clause

A contract that allows a landlord to increase the rent in future if there’s an increase in certain costs such as operating costs, real estate taxes, etc.

Once you familiarise yourself with these terms, contacting and speaking to a commercial real estate company or a Real estate property management firm will be easy. Since you are now very well acquainted with some of the major terms asking questions and understanding contracts will be less of a challenge.

I am John Daniel, A US based Real Estate Professional and Blogger. With experience in real estate of more than 10 years, the above mentioned article is solely based on my experiences with madison management .