Capital Expenses
This type of expense is most often defined by reference to generally accepted accounting principles (GAAP), but GAAP does not provide definitive guidance on all possible expenditures. Accountants will often disagree on whether or not to include certain items.

Capitalization
A method of determining value of real property by considering net operating income divided by a predetermined annual rate of return. See "Capitalization Rate."

Capitalization Rate
The rate that is considered a reasonable return on investment (on the basis of both the investor's alternative investment possibilities and the risk of the investment.) Used to determine and value real property through the capitalization process. Also called "free and clear return." See "Capitalization".

Carrying Charges Costs
 incidental to property ownership, other than interest (i.e. taxes, insurance costs and maintenance expenses), that must be absorbed by the landlord during the initial lease-up of a building and thereafter during periods of vacancy.

CCIM
CCIM stands for Certified Commercial Investment Member and is a professional designation from the Commercial Investment Real Estate Institute, one of nine affiliated groups of the National Association of Realtors. See Commercial Investment Real Estate Institute for more details.

Certificate of Occupancy
A document presented by a local government agency or building department certifying that a building and/or the leased premises (tenant's space), has been satisfactorily inspected and is/are in a condition suitable for occupancy.

Chapter 7
That portion of the Federal Bankruptcy Code that deals with business liquidations. Chapter 11 is that part of the Federal Bankruptcy Code that deals with business reorganizations.

Chapter 11
That portion of the Federal Bankruptcy Code that deals with business reorganizations. Chapter 7 is that part of the Federal Bankruptcy Code that deals with business liquidations.

Circulation Factor
 Interior space required for internal office circulation not accounted for in the "net square footage." Many in the industry use a circulation factor of 1.35 x the net square footage for office and fixed drywall areas and a circulation factor of 1.45 x the net square footage for open area workstations. See also "Net Square Footage" and "Usable Square Footage."

CIREI
Stands for Commercial Investment Real Estate Institute and is one of nine affiliated groups of the National Association of Realtors. For a further explanation, see Commercial Investment Real Estate Institute.

Clear-Span Facility
A building, most often a warehouse or parking garage, with vertical columns on the outside edges of the structure and a clear span between columns.

Commercial Investment Real Estate Institute (CIREI)
The Commercial Investment Real Estate Institute is one of nine affiliated groups of the National Association of Realtors. Through an extensive education curriculum, programs, and publications, CIREI enhances the professional development of those engaged in commercial-investment real estate. The institute confers the Certified Commercial Investment Member (CCIM) designation. CCIMs are recognized for an expertise of commercial real estate brokerage, leasing, asset management, valuation and investment analysis, and uphold the industry's highest professional and ethical standards. Membership consists of 5,000 candidates and nearly 5,000 designees throughout North America. Regions and chapters provide designees and candidates the opportunities to promote business and education goals through local and regional forums and meetings. The CCIM network includes brokers, leasing professionals, investment counselors, property managers, appraisers, corporate real estate executives, developers, attorneys, asset managers, bankers, and other allied professionals.

Common Area
There are two components of the term "common area". If referred to in association with the Rentable/Usable or load factor calculation, the common areas are those areas within a building that are available for common use by all tenants or groups of tenants and their invitees (i.e. lobbies, corridors, restrooms, etc.). On the other hand, the cost of maintaining parking facilities, malls sidewalks, landscaped areas, public toilets, truck and service facilities, and the like are included in the term "common area' when calculating the tenant's pro-rata share of building operating expenses.

Common Area Maintenance (CAM)
This is the amount of additional rent charged to the tenant, in addition to the Base Rent to maintain the common areas of the property shared by the tenants and from which all tenants benefit. Examples include: snow removal, outdoor lighting, parking lost sweeping, insurance, property taxes, etc. Most often, this does not include any capital improvements (see "Capital Expenses") that are made to the property.

Comparables
Lease rates and terms of properties similar in size, construction quality, age, use and typically located within the same sub-market and used as comparison properties to determine the fair market lease rate for another property with similar characteristics.

Concessions
Cash or cash equivalents expended by the landlord in the form of rental abatement, additional tenant finish allowance, moving expenses, cabling expenses or other monies expended to influence or persuade the tenant to sign a lease.

Condemnation
 The process of taking private property, without the consent of the owner, by a governmental agency for public use through the power of eminent domain. See also "Eminent Domain".

Construction Management
The actual construction process is overseen by a qualified construction manager who ensures that the various stages of the construction process are completed in a timely and seamless fashion, from getting the construction permit to completion of the construction to the final walk-through of the completed leased premises with the tenant.

Consumer Price Index (CPI)
Measure inflation in relation to the change in the price of a fixed market basket of goods and services purchased by a specified population during a "base" period of time. It is not a true "cost of living" factor and bears little direct relation to actual costs of building operation or the value of real estate. The CPI is commonly used to increase the base rental periodically as a means of protecting the landlord's rental stream against inflation or to provide a cushion for operating expense increases for a landlord unwilling to undertake the record keeping necessary for operating expense escalations.

Contiguous Space
(1) Multiple suites/spaces within the same building and on the same floor which can be combined and rented to a single tenant. (2) A block of space located on multiple adjoining floors in a building (i.e., a tenant leases floors 6 through 12 in a building).

Contract Documents
The complete set of design plans and specifications for the construction of a building or of a building's interior improvements. Working drawings specify for the contractor the precise manner in which a project is to be constructed. See also "Specifications" and "Working Drawings."

Conveyance
Most commonly refers to the transfer of title to property between parties by deed. The term may also include most of the instruments by which an interest in real estate is created, mortgaged or assigned.

Core Factor
Represents the percentage of net rentable square feet devoted to the building's common areas (lobbies, restrooms, corridors, etc.) This factor can be computed for an entire building or a single floor of a building. Also known as a loss factor or rentable/useable (R/U) factor, it is calculated by dividing the rentable square footage by the usable square footage.

Cost Approach
A method of appraising real property whereby the replacement cost of a structure is calculated using current costs of construction.

Counselors of Real Estate (CRE)
Counselors of Real Estate is one of nine affiliated groups of the National Association of Realtors. See CRE

Covenant
A written agreement inserted into deeds or other legal instruments stipulating performance or non-performance of certain acts or, uses or non-use of a property and/or land.

Covenant of Quiet Enjoyment
The old "quiet enjoyment" paragraph, now more commonly referred to as "warranty of possession," had nothing to do with notice in and around the leased premises. It provides a warranty by landlord that it has the legal ability to convey the possession of the premises to tenant; the landlord does not warrant that he owns the land. This is the essence of the landlord's agreement and the tenant's obligation to pay rent. This means that if the landlord breaches this warranty, it constitutes a actual or constructive eviction.

CPM
"CPM is a professional designation that stands for Certified Property Manager (CPM) and is awarded by the Institute of Real Estate Management. Today, nearly 9,000 property managers and real estate asset managers hold this designation.

CRB
CRB stands for Certified Real Estate Brokerage Manager and is a professional designation of the Real Estate Brokerage Managers Council, one of nine affiliated groups of the National Association of Realtors. Recognized industry-wide as the symbol of excellence, the CRB designation confers upon those who have earned it the highest level of professional achievement and recognition in the specialized field of brokerage management.

CRS
CRS stands for Certified Residential Specialist and is a professional designation of the Residential Sales Council, one of nine affiliated groups of the National Association of Realtors. CRS designees are recognized experts in listing, selling and real estate investment.

CRE
CRE stands for Counselor of Real Estate and is a professional designation from the Counselors of Real Estate, one of nine affiliated groups of the National Association of Realtors. Members of the Counselors of Real Estate are recognized problem solvers who provide counseling services, including asset and portfolio management, debt restructuring, best use of land studies, and economic and market analyses. The organization's CRE designation is awarded to all members and attests to the practitioner's expertise, reputation and adherence to a strict Code of Ethics. CREs encompass practicing counselors or prominent real estate, financial, legal and accounting firms as well as leaders of government and academia. Membership is selective, extended by invitation on either a self-initiated or sponsored basis.

Cumulative Discount Rate
The interest rate used in finding present values that when applied to the rental rate takes into account all landlord lease concessions and then expressed as a percentage of base rent.