Commercial Real Estate Definitions - From A to M
Commercial real estate is distinctly different from residential
real estate. The terminology is very different and here is a
list of new terms from O to Z.
Commercial Terms
Operating Expenses: Just as it sounds, operating expenses are
those costs associated with operating a commercial property.
Contract and state law typically govern the exact nature of the
operating expenses.
Partition Wall: A wall built in the internal area of a suite to
divide the general space. For instance, offices built during a
tenant improvement project with have partition walls separating
them.
Punch List: A punch list runs part and parcel with a walk
through of completed construction work. The construction company
and client will walk through the area and complete a punch list
of items that need to be fixed or modified. .
Shell Space: The interior of a commercial building that has been
completed, but does not yet have any tenant build outs. The
shell space generally refers to this gross square footage
regardless of whether tenant improvements have occurred or not.
Substantial Completion: Notice given by a contractor to the
client indicating the property has been completed to the point
where a walk through and punch list review are appropriate.
Usable Square Feet: The square feet in a building, suite,
warehouse and so on that can actually be used by tenants. Due to
building regulations and design issues, certain amounts of a
space in a tenant suite may not be usable and such footage is
excluded from this calculation
Unlike residential real estate, commercial real estate is
primarily considered a business transaction. Learn the terms and
you're well on your way to moving smoothly through the process.