Leasing & Property Operations Flashcards
6 cards from real REA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Leasing & Property Operations flashcards as text
What is the key difference between a 'gross lease' and a 'net lease'?
Answer: In a gross lease, the landlord pays operating expenses; in a net lease, the tenant pays some or all operating expenses
Under a gross lease the landlord bears operating expenses included in the base rent, while net leases pass through some or all expenses to tenants.
What is a 'tenant improvement allowance' (TI allowance) and who typically funds it?
Answer: A landlord-funded contribution toward the cost of building out a tenant's space to their specifications
A TI allowance is a landlord-funded contribution per square foot that covers the cost of constructing or renovating space to meet a tenant's operational needs.
What does 'free rent' represent in a commercial lease negotiation?
Answer: A rent abatement period during which the tenant occupies the space without paying base rent
Free rent is a landlord concession granting the tenant a period of occupancy without base rent, effectively reducing the tenant's effective rent over the lease term.
What is a 'CAM reconciliation' in commercial property management?
Answer: The annual process of comparing actual common area maintenance costs to tenant estimates and adjusting billings
CAM reconciliation compares actual operating expenses to the estimated amounts billed to tenants throughout the year, resulting in a true-up payment or credit.
What is an 'anchor tenant' and why is it important to a retail property?
Answer: A large, high-traffic tenant that draws customers to a retail center, benefiting smaller co-tenants
Anchor tenants (grocery stores, department stores, big-box retailers) generate customer traffic that drives sales for smaller inline tenants, making the center more viable.
In commercial leasing, what is a 'lease abstract'?
Answer: A summary of the key business and legal terms of a lease agreement prepared for quick reference
A lease abstract condenses the critical terms — rent, term, options, expenses, and clauses — into a standardized summary for use by asset managers and analysts.