Definitions

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Rentable Square Feet (RSF)

The “gross” area of a Tenant’s leased space. The RSF includes the Tenant’s pro rata share of common areas of a property, such as corridors, restrooms, lobbies, elevators, mechanical rooms, etc.

Useable Square Feet (USF)

The “net” area, is “inside” the Tenant’s four walls. This figure does not include common areas.

Triple Net Expenses

AKA operating expenses, or CAM. This is an amount paid by a Tenant in addition to its negotiated lease rate under a triple net lease. This includes property taxes, insurance and CAM. Most commonly expressed on a per-square foot basis, such as $4.25 psf.

Annual Escalations

An amount of a lease rate is increased on the anniversary date of your lease each year. Commonly expressed as a percentage, such as 3%. Annual escalations may be based on an index such as CPI.

Annual escalations favor the Landlord and compensate him for cost increases such as inflation.

Hold Over Tenant

When a Tenant remains in their space past the scheduled lease expiration. This is dangerous for a business—the Landlord can, and usually does, significantly increase the rent during the Holdover. A holdover tenant is typically on a month-to-month term and must vacate upon thirty (30) days prior written notice by the Landlord.

Option to Renew

This is a written agreement signed by both the landlord and Tenant or a specific provision contained in a lease agreement that provides a tenant with the unilateral option to renew their lease pursuant to the negotiated terms of the Option agreement.

An Option to Renew is an advantage to a Tenant.

Estoppel

A form or document that summarizes and affirms the terms of a lease.

Default

When a party—either a Landlord or Tenant – breaches a provision of the lease agreement.