Common questions about commercial real estate jargon

On Behalf of | Jan 31, 2019 | Commercial Real Estate Leases |

It can feel overwhelming when you start to navigate the world of commercial real estate. When negotiating leases, and reading through terms, you may not understand some of the words used. It’s easy to overlook such details, but this is a dangerous thing to do because you may be missing some important information.

Therefore, it is a good idea for you to take the time to familiarize yourself with commercial real estate language so that you can be more confident and prepared when negotiating leases.

What does absorption mean in relation to commercial real estate?

Commercial real estate landlords are obviously focused on maximizing the amount of space being rented out. Absorption is a term for the change in the amount of space being rented from one quarter to another.

What does net present value (NPV) mean?

When comparing different commercial real estate properties, the potential monthly or quarterly profits can be estimated through price and rent valuation. The gain or cost when being leased is calculated and termed as the net present value.

What is an estoppel?

An estoppel is a type of statement that gives a summary of the nature of a commercial real estate lease. It tends to be written and signed by the prospective tenant, and it may be used in order for the tenant to get a loan.

It is important that you research any terms that you are unfamiliar with before signing a commercial real estate lease in the state of Florida. Always have an attorney review any contract, including commercial real estate leases, before signing.