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- Obsolescence
- The inadequacy, disuse, outdatedness, or non-functionality of facilities, infrastructure, products, or production technologies due to effects of time, changing market conditions, or decay. This factor is considered in depreciation to cover the decline in value of fixed assets due to the invention and adoption of new production technologies or changing consumer demands.
- Occupancy Cost
- Charge to tenant, pursuant to its lease, such as rent, operating expense increases, parking charges, moving expenses, remodeling costs, etc.
- Office property
- A commercial property type maintained for or occupied by professional or business offices. Such properties typically house management and staff operations. Office properties may be classified as Class A, B, or C. Class A properties are the most functionally modern. Class B and C properties in the same market typically command lower rents because they are older and in need of modernization.
- Office/service
- Industrial space category in attractive, park-like settings with landscaping. They are usually at the highest end of market rents and devote more than 25% of their spaces to offices. Office/service properties are similar to research and development facilities.
- Office/warehouse
- Industrial space category that may devote 5 to 25 percent of its space to office requirements and typically is constructed of metal, brick, block, or wood. This category usually features dock-high loading.
- Operating expense stop
- A negotiable amount at which the owner’s contribution to operating expenses stops. It also can be stated as the amount above which the tenant is responsible for its pro rata share of operating expenses.
- Operating expenses
- Cash outlays necessary to operate and maintain a property. Examples of operating expenses include real estate taxes, property insurance, property management, maintenance, utilities, and legal or accounting expenses. Operating expenses do not include capital expenditures, debt service or cost recovery.
- Opportunity Cost
- The cost of selecting one alternative is the benefit foregone from the next best alternative.
- Original principal balance
- The amount of principal owed on a loan before a borrower makes any payments.
- Origination fee
- See loan origination fee.
- Outlet center
- A retail property type usually located in rural or occasionally in tourist locations. These centers consist mostly of manufacturers’ outlet stores selling their own brands at a discount and typically are not anchored. A strip configuration is most common, although some are enclosed malls or arranged in a village cluster.
- Overage rent
- Also known as percentage rent.
- Owner
- The party who has the right to possess, use, lease and sell a property. See landlord and lessor.
- Owner financing
- A transaction in which the seller of a property agrees to finance all or part of the purchase.
Some definitions come from the Certified Commercial Investment Member Institute (CCIM).
