Relocating your business to a new rental space might not be something that you do very often in your career, and as a result it can be hard to become fully knowledgeable about this process. To learn or refresh your memory before beginning your search, you might want to familiarize yourself with some basic real estate terms:
- Fair Market Value (FMV): The price that a property would most likely sell for in the current market.
- Fee Interest: A type of ownership in which an owner has unrestricted power to use and dispose of the property, which can also be inherited or left by will. A common synonym for ownership.
- Grantee: The buyer, a person to whom a grant is made.
- Grantor: The seller, the person granting property or property rights.
- Leasehold Interest: Ownership of realty that is held under a lease; the use of said real estate for a fixed period of time.
- Lessee: The business leasing realty from another party.
- Lessor: The individual or owner of a building leasing space to another party.
- Lien: An encumbrance or claim against property in exchange for money.
- NNN Lease: A type of lease agreement in which the tenant is responsible for paying (in addition to rent) its proportionate share of building insurance, real estate taxes, and maintenance of common areas such as landscaping, snow plowing, and management, as well as his or her own utility and janitorial service.
- Operating Expenses: The cost to the landlord to operate the property. This includes utilities, real estate taxes, insurance, common area refurbishing, maintenance and repairs, materials and supplies, janitorial and repair services, security fees, property management costs, contractors and employees, cost of signs, outside maintenance, garbage removal, bulb replacement, pest control, etc.
It is important to have a working knowledge of these and other real estate terms as you enter into lease negotiations, so be sure to do your research!