Leasing and Marketing Flashcards

What is the primary goal of a property's marketing plan?

Answer: To attract qualified prospects and minimize vacancy

A marketing plan identifies target audiences, outlines strategies to attract qualified tenants, and aims to minimize costly vacancy periods.

What does 'absorption rate' measure in commercial real estate leasing?

Answer: The pace at which available space in a market is leased over a given period

Absorption rate measures how quickly available square footage in a given market is leased, indicating supply and demand dynamics.

Which tenant screening criterion is permissible under Fair Housing law?

Answer: Using consistent, objective criteria such as minimum income and credit score thresholds

Consistent, objective criteria applied equally to all applicants—income ratios, credit scores, rental history—are permissible and reduce Fair Housing risk.

What is a 'lease renewal option'?

Answer: A provision giving the tenant the right to extend the lease at specified terms

A renewal option gives the tenant the contractual right to extend the lease for an additional term, usually at a predetermined rent or formula.

What is 'effective rent' in commercial leasing?

Answer: The average net rent over the lease term after accounting for all concessions

Effective rent averages the total net rent received over the entire lease term, factoring in free rent periods, tenant improvement allowances, and other concessions.

What is the purpose of a 'tenant improvement (TI) allowance' in commercial leasing?

Answer: Landlord-funded money provided to a tenant to customize the space for their use

A TI allowance is landlord-funded capital provided to help a tenant build out or customize the leased space to meet their operational needs.