Real Estate Definitions – Part 6 – T to Z

Here is the last post of my new blog series with definitions and terminologies used in ICI Real Estate. I hope you enjoyed reading these and learned a new term or two.

View all of the posts here: A-C / D-H / I-M / N-R / S

Takeup – When the space is physically occupied. (Synonym: leasing activity)

Tenants or Tenancy in Common (TIC) – An estate held by two or more persons, each of whom has an undivided interest, which means that each party has the right to sell or transfer the ownership of his or her ownership interest.

Third-party Logistics (3PL) – Businesses that provide one or more logistics services including multiclient warehousing, contract warehousing, transportation management, distribution management, inventory management and freight consolidation.

Total Inventory – The total number of buildings and total square footage (net rentable area) in the competitive inventory. Buildings under construction are not part of total inventory. Total inventory increases when a new building is delivered and decreases when an existing building is demolished or changes use. Total inventory includes properties under renovation if the building remains inhabitable during the renovation but excludes properties converting to a different use. Total inventory is typically measured at the submarket and market levels. A description of the characteristics and numeric thresholds that make up the total inventory should be provided. The total inventory figure may vary from one data provider to another as a result of tailored definitions of what constitutes the competitive inventory. (See competitive inventory for more information.)

Town Center – A historical term used to refer to the commercial, civic or geographic center of a community. Today, the term is associated with retail and has come to be known as a robust retail cluster with civic or open spaces in proximity to a variety of uses such as residential, office, retail and hotel.

Traditional Outlet – The tenants offer a discount version of mainstream retailers and are often called “factory stores.” They usually focus on apparel. Traditionally, the stores have been located far outside a city center. The outlets are designed as a destination or tourist magnet. (See Retail Building Types Matrix.)

Traditional Retailer – A retailer that started selling in brick-and-mortar locations but that now also sells items online.

Transit Score – Transit score is a number between 0 and 100 that measures the relative usefulness of nearby routes. “Usefulness” is typically measured by a weighted algorithm of characteristics such as distance to the nearest stop; mode of the route such as bus, ferry or rail; and frequency of service.

90–100Rider’s Paradise World-class public transportation
70–89Excellent Transit Transit convenient for most trips
50–69Good Transit Many nearby public transportation options
25–49Some Transit A few nearby public transportation options
0–24Minimal Transit Possible to get on a bus

Transit-oriented Development (TOD)– Real estate projects that are built around transit to maximize access to shared transportation modes. Typically, the TOD project is dense and walkable, and it includes a mix of uses such as residential, office, retail, hotel and entertainment.

Triple Net Lease – A lease agreement whereby the tenant pays taxes, maintenance and property insurance as well as all operating costs associated with the tenant’s occupancy, including personal property taxes, janitorial services and all utility costs. The landlord is responsible for the roof and the structure and sometimes the parking lot. (See Common Lease Types Matrix.)

Trophy Building – A landmark property that is located in a highly desirable submarket, is designed by a recognized architect, and features high-end finishes and modern or efficient systems. This building commands among the highest rents in the market and is more than 80 percent occupied by the market’s premier tenants. It is highly sought after by institutional investors such as pension funds and insurance companies as well as by foreign investors. These properties are more desirable than Class A buildings.

Truck Court – Exterior area adjacent to an industrial building’s loading docks where trucks maneuver. The most important measure of the truck court is the depth from the building to the end of the truck court. Greater depth allows for greater maneuverability and better accommodates multiple trucks.

Truck Terminal – This specialized distribution building for redistributing goods from one truck to another serves as an intermediate transfer point. The facilities are primarily used for staging loads (rather than long-term storage) and possess very little, if any, storage area. (Typical characteristics are shown in the Industrial Building Types Matrix.)

Truck-turning Radius – The tightest turn a truck can make, depending on several variables such as truck configuration, trailer size and location of adjacent objects that obstruct the inner turning radius.

Truss – A framework of beams forming a rigid structure (as in a roof truss).

Truss Height – Distance from the floor to the bottom edge of a truss used to support the ceiling or roof of a building. If there are hanging objects, beams or joists below the truss, the clear height will be lower than the truss height.

Turn-key – A term used to describe a landlord’s agreement to provide and pay for improvements to a tenant’s premises. The landlord is required to deliver the premises in a condition ready for the tenant’s stipulated use.

Under Construction – A building is under construction when construction permits have been obtained and site excavation has begun. If a site is being redeveloped, demolition of existing structures does not necessarily indicate that construction has begun. Sites are sometimes cleared years in advance of a groundbreaking.

Under Renovation – A building is typically under renovation when construction permits have been obtained and demolition has begun. A building is under renovation if it remains inhabitable by tenants during the construction. If an existing building is gutted extensively (i.e., elevators and bathrooms do not function and it can, therefore, not be occupied by a tenant), then the building should be removed from inventory and redelivered when the occupancy permit is issued.

Urban – Urban areas are commonly identified with a city, are typically built on a traditional street grid, have consistent building setbacks, have sidewalks and usually include multiple-story buildings.

Usable Area – This relative term is best compared to rentable area. Usable area is the amount of space that can actually be used by tenants within the space they lease. For example, columns inside a tenant space are counted in the measure of rentable area, but the space occupied by the column cannot be used by the tenant. A tenant’s usable area does not include common areas in the building.

Vacancy Rate – A measurement expressed as a percentage of the total amount of vacant space divided by the total amount of inventory. This measurement is typically applied to a building, a submarket or a market.

Vacant Space – Inventory that is not currently occupied. If subtenant space is excluded from the calculation, the term “direct vacant space” is recommended.

Value Add Investment – An investment in a real estate asset with existing cash flow (and value) that can be increased by raising occupancy, rents or both. Owners typically carry out one or more of the following to add value to a building: improve or replace building systems, provide new finishes, introduce new amenities, improve access or circulation to the building, add square footage, etc.

Walk Score – Walk score is a number between 0 and 100 that measures the number of amenities such as retail, businesses, parks, theaters and schools that can be accessed by foot inside a 1-mile radius from a particular address.

90–100Walker’s Paradise Daily errands do not require a car
70–89Very Walkable Most errands can be accomplished on foot
50–69Somewhat Walkable Some errands can be accomplished on foot
25–49Car-dependent Most errands require a car
0–24Car-dependent Almost all errands require a car

Warehouse – A facility primarily used for the storage or distribution or both of materials, goods and merchandise. (Typical characteristics are shown in the Industrial Building Types Matrix.)

Work Letter – A legal document that outlines the obligations of the landlord relative to the improvements necessary to prepare leased premises for a tenant’s occupancy. Items typically found in a work letter include a description of the improvements, the cost thereof, and the portion of the cost to be paid by the landlord, the completion date and the insurance requirements of contractors performing the improvements.

Year Built – The year the building was delivered to the market as a result of completed construction.

Year Renovated – The year the building last received a certificate of occupancy (COO) for a major renovation.