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Absolute Net

Lease that requires the tenant to pay all costs (including rent) associated with the operation, repair and maintenance of the building. This includes real estate taxes, utilities, repair and maintenance. Also referred to as net-net-net (NNN) or triple net.

Absorption

The amount of inventory or units of a specific commercial property type that become occupied during a specified time period (usually a year) in a given market, typically reported as the absorption rate.

Accelerated cost recovery system

A tax calculation that provides greater depreciation in the early years of ownership of real estate or personal property.

Acceleration clause

A provision that gives a lender the right to collect the balance of a loan if a borrower misses a payment.

Acre

A measurement of land equal to 43,560 square feet.

Actual age

The number of years a structure has been standing.

Adjustable-rate mortgage (ARM)

A loan with an interest rate that is periodically adjusted to reflect changes in a specified financial index.

Adjusted cost basis

The cost of any improvements the seller makes to the property. Deducting the cost from the original sales price provides the profit or loss of a home when it is sold.

Adjustment period

The amount of time between interest rate adjustments in an adjustable-rate mortgage.

Administrator

A person given authority to manage and distribute the estate of someone who died without leaving a will.

Administrator's deed

A legal document that an administrator of an estate uses to transfer property.

Adverse possession

The acquisition of title to property through possession without the owner's consent for a certain period of time.

Adverse use

The access and use of property without the owner's consent.

Alienation clause

A provision that requires the borrower to pay the balance of the loan in a lump sum after the property is sold or transferred.

Americans with Disabilities Act

A law passed in 1990 that outlaws discrimination against a person with a disability in housing, public accommodations, employment, government services, transportation and telecommunications.

Amortization

The repayment of loan principal and interest through equal payments over a designated time period.

Amortization schedule

Mathematical tables that lenders use to calculate a borrower's monthly payment.

Anchor bolt

A large steel bolt anchored in concrete and attached to a building to prevent the structure from moving.

Annual Percentage Rate (APR)

The cost of the loan expressed as a yearly rate on the balance of the loan.

Annual debt service (ADS)

The total amount of principal and interest to be paid each year to satisfy the obligations of a loan contract.

Annuity

Regular fixed payments or receipts over a designated time period.

Appraisal

An opinion of the value of a property at a given point in time.

Appraisal fee

The fee that an appraiser charges to estimate the market value of the property.

Appraisal report

A detailed written report on the value of a property based on recent sales of comparable sites in the area.

Appraised value

An opinion of the current market value of a property.

Appreciation

An increase in the value of a property.

Asbestos

A fire-resistant mineral used for insulation and home products that has been found to pose a health hazard.

Assessed value

A tax assessor's determination of a property’s value in order to calculate a tax base.

Assessment

The estimated value of a piece of real estate or a levy placed on property in addition to taxes.

Assets

Items of value which include cash, real estate, securities and investments.

Assignment

A transfer in which all of the tenant’s leasehold interest in a property goes to another party. Nevertheless, the original tenant remains liable unless released from future obligations by the owner.

Assignor

A person who transfers rights and interests of a property.

Assumable mortgage

A mortgage that can be transferred to another borrower.

Assumption clause

A provision that allows a buyer to take responsibility for the mortgage from a seller.

Assumption fee

A fee the lender charges to process new records for a buyer who assumes an existing loan.

Average annual effective rate

The average annual effective rent divided by the total square feet.

Average annual effective rent

The tenant’s total effective rent divided by the lease term.

Aviation easement

An easement over private property near an airport that limits the height of structures and trees.

Some definitions come from the Certified Commercial Investment Member Institute (CCIM).