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Terms to Know

Term/Acronym

Definition

Access agreement

An agreement for a temporary and limited use of another’s property

Assessed value

The dollar value of an asset assigned by a public tax assessor for the purposes of taxation

Common area

For lease purposes, the areas of a building that is accessible for the nonexclusive use of all its tenants, such as lobbies, corridors and parking lots

Deed

A document used to convey ownership or vested interest in a property

Lease or deed of lease

Grants a party the right to use real property for a specified use through a stated period of time, rather than transferring full ownership, which creates a leasehold interest

Leasehold

The interest or estate created by a real estate lease

Leasehold improvements

This type of improvements is generally acquired or provided by the tenant, and the tenant can generally remove the improvements at the expiration of the lease (compare to tenant improvements)

License agreement

An agreement that may be granted by a party (“licensor”) to another party (“licensee”) as an element of an agreement between those parties for a limited use of another’s property. Agreements for the use of a portion of a parking lot is an example of when a license may be used.

Gross lease

A lease in which the tenant’s base rent includes an amount for current operating expenses and real estate taxes

Net lease

A lease in which the tenant pays, as additional rent, their proportionate share of building taxes, utilities, insurance and any other services associated with the facility. This may be partial net, where only certain operating expenses are paid by the tenant, or it may be full net, most commonly referred to as triple net or NNN, where the tenant pays all of the operating expenses assigned to the area leased.

Operating expenses

The actual costs incurred to run a building, such as routine repairs and maintenance, janitorial expenses and utilities for common areas

Rentable area

The area (in square feet) quoted by building ownership when a space is offered for lease

Tenant improvements

Tenant improvements, often referred to as TI, are modifications made to the interior of a commercial or industrial property by the owner to accommodate the needs of a tenant. Typical TI includes floor and wall coverings, ceilings, partitions, air conditioning and security. The financial burden for the costs of the TI is a negotiated term.

VCU Real Estate Foundation

The VCU Real Estate Foundation's mission is to accept, acquire, lease, sell, operate and/or manage property in support of the educational goals of the university.