Useful Terms


An assignment is a transfer of primary rights and liabilities under the lease to another party for the remainder of the leased term, except that the assignor (original tenant) is not relieved from any liability until the end of the leased term.

Base Year

A base year is typically the first year of a leased term under a gross lease. Many gross leases contain clauses whereby the landlord pays the operating expenses for the first year and in subsequent years, tenant pays any increase in annual operating expenses over the base year amount.

Common Area Maintenance (CAM) Expenses

CAM Expenses is a term frequently used in retail leases. They are those expenses incurred in operating and maintaining the common areas of a property, including areas of the buildings and parking lots. Examples of CAM expenses may include landscaping, refuse collection, and insurance.

Gross Lease

A gross lease is one in which the landlord pays all or a portion of all the operating expenses. Often, tenants will reimburse landlord for a pro-rata share of increased operating expenses over a base year.

NNN (Triple Net) Lease

A triple net lease is one in which the tenant pays a pro-rata share of all common area maintenance expenses, real property taxes and insurance, in addition to base rent, every month. All leases for retail spaces are triple net.

Operating Expenses

Operating expenses are those amounts paid to operate and maintain a property, similar to CAM expenses, but is a term more often used in office leases.

Percentage Rent

Retail leases sometimes include Percentage Rent clauses. It is an amount paid to the landlord in addition to base rent, based on a percentage of tenant’s gross sales.

Pro-rata Share

A tenant’s pro-rata share is the percentage that the square footage of the leased premises bears to the gross leasable area (GLA) of the property.

Rentable Square Footage

Rentable square footage is the useable square footage of the leased premises plus a percentage of the lobbies, corridors, restrooms and other public areas. This term is typically found in office building leases.

Useable Square Feet

Useable square footage is a term often used in office building leases that refers to the square footage of the leased premises occupied by the tenant for its exclusive use.

Dictionary of Real Estate Terms, 6th edition
ICSC’s Dictionary of Shopping Center Terms
IREM Glossary of Real Estate Management Terms