Office search glossary.

Searching for a new office space? We've put together a super-useful jargon-buster for those looking to relocate.

Alienation

The right to dispose of an interest in the property. These provisions outline a tenant’s ability to assign the lease, underlet or sub-let, or share occupation of the premises with another tenant.

Alterations

Alterations to any space are works carried out by an incoming tenant ahead of, or during their occupation. The majority of alterations will require landlord’s consent in the form of a ‘Licence for Alterations’. This should be granted by the landlord ahead of commencement of works.

Assignment

An assignment is the legal and contractual process of transferring a lease agreement and its responsibilities from one party to another.

Break Clause

A break clause (alternatively known as a ‘break option’ or ‘option to determine’) is a clause in a lease which provides the landlord or tenant with a right to terminate the lease before its contractual expiry date, if certain criteria are met. A break notice should be issued prior to the break within a time period set out in the lease.

Break Notice

A break notice is the formal notification that one party wishes to exercise its right to terminate the lease (a break clause). Break Notices must be served officially and correctly. The notice must be served the correct number of months before the break date.

Break Notice

A break notice is the formal notification that one party wishes to exercise its right to terminate the lease (a break clause). Break Notices must be served officially and correctly. The notice must be served the correct number of months before the break date.

Broker Commission

When you sign a space agreement with a flexible office operator, the operator pays the broker (us) a fee. It’s included within your desk or monthly rate. That’s how brokers work for occupiers ‘for free’.

Business Rates

Business rates, or non-domestic rates, are a tax on the occupation of commercial property and other non-domestic property. Properties are assessed in a rating list with a rateable value. Business rates are one of three costs that make up total occupational cost for traditional leased office space.

Business Improvement District

A business improvement district (BID) is a defined area within which businesses are required to pay an additional tax (or levy) in order to fund projects within the district’s boundaries

CapEx

Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company.

Covenant

A covenant in its most general sense, is a solemn promise to engage in or refrain from a specified action.

A tenant’s covenant strength refers to the quality of a tenant’s financial status and its ability to perform the covenants in the lease.

Co-working

Co-Working is a modern style of working in which several workers from different companies share a workspace, allowing cost savings and convenience through the use of common infrastructure, such as equipment, utilities, reception and meeting facilities.

Demise

Demised premises are the extent of the premises included within a lease and may include other facilities such as WCs or showers.

Depreciation

Depreciation is an accounting term that refers to the division of a cost over time based on the lifespan of an asset.

Dilapidations

The term ‘dilapidations’ refers to the breaches of a tenant’s lease covenants in respect of repair, reinstatement of alterations, and redecoration. Can be raised by a landlord during the term of the Lease (interim dilapidations) or, more commonly, at lease expiry (terminal dilapidations).

EBITDA

EBITDA is an abbreviation that stands for Earnings Before Interest, Taxes, Depreciation, and Amortisation. Generally a measure of a company’s net operating income.

Estate Charge

An estate charge is that part of the tenant’s service charge liability relating to the maintenance of the estate on which a commercial property is situated. Includes, for example, landscaping, maintenance and lighting of estate roads, as well as security.

Fit-Out

Fitting out is the process of building and furnishing your office ahead of occupation. This is only relevant with traditional leased offices as with co-working and managed workspace, this is either complete already or organised for an incoming tenant.

Properly have an in-house Projects team that can help you realise your new office from start to finish.

Fixed Desk

Fixed Desk is a term used by flexible office brands. A fixed desk is a permanent desk allocation in return for a monthly subscription. Fixed desks tend to be more expensive than Hot Desks which are more flexible and used by ‘nomadic’ workers.

Fully Repairing and Insuring Lease

FRI is a term used to describe a lease where the tenant is responsible for all repairs and for insuring. However, the term also applies to the liability for payment of these costs, known as effective FRI. FRI leases therefore include those where the landlord pays for external repairs and recovers the cost via service charge or contribution to “shared” expenditure. Also where, as is most common, the landlord maintains the insurance and recovers the cost of the premium from the tenant, usually as further rent.

Hot Desk

Hot desking, sometimes referred to as flex desking, refers to the practice of maximising utilisation rates of a workstation through the use of non-assigned desks. Workstations are therefore used on a first-come, first-served basis.

Headline Rent

A headline rent is the rent that is paid under a lease, after the end of any rent-free periods or any period of reduced rent. It creates an artificially inflated rent by ignoring the rent-free period, period of reduced rent or any other concessions the landlord may have given to the tenant in return for a higher headline rate. Headline rent is most commonly associated with open market lettings, but increasingly at lease renewal and lease re-gearing / restructuring. Headline rent usually also forms the benchmark for any “upward only” rent review in the lease.

Heads of Terms

A heads of terms agreement identifies and highlights the requirements of both the transacting parties in a property deal. Its advantage is that both parties will fully understand what they are subject to, and reduce or abolish any misunderstandings from each party. The heads of terms will form the basis of the contract and be forwarded to the parties’ solicitors to draft the contract or lease.

HVAC

A frequently used abbreviation for heating, ventilation, and air conditioning.

Incentive

An incentive is a payment that is used to encourage a tenant to take on a new leased office. A common example is where a landlord pays a tenant a sum of money to contribute to the cost of a tenant’s fit-out or allows a rent-free period.

Landlord

The owner of a property that is leased to a tenant.

Landlord’s Consent

Many clauses in commercial leases are “permissive”, and allow the tenant to implement changes or alterations to the property. Usually, however, the landlord’s formal consent is required, and the lease will contain provisions governing how this is to be obtained and documented.

Lease Renewal

A lease renewal is the renegotiation of a lease with an existing tenant who do not wish to vacate the building at their lease expiry.

License Agreement

Whilst traditional leased office space is subject to a contract (in the form of a lease), flexible operators ask members to sign up to License Agreements. These are far shorter, simpler contracts that require little to no legal review. Similar to a gym membership, there is a minimum term and then you can leave any time.

Managed Office

Managed Offices are sometimes confused with co-working and flexible offices. Whilst a Managed Office still provides a flexible workspace solution, the transaction time is generally longer than a typical flexible office. A Managed Office provider will provide a bespoke office for your requirements including fit-out, furniture, IT etc all for a monthly cost. Unlike co-working and other flexible office solutions, the space will be branded for your company and will typically have its own front door.

Net Effective Rent

The equivalent rent that would be payable after all incentives (for example capital contributions and rent free periods) are taken into consideration.This calculation is used by the VOA to determine the actual Rateable Value. It is also used in lease negotiations to identify the appropriate level of rent.

Net Internal Area

The ‘useable’ measured internal floor area of a building, which is measured to the internal face of external walls, by excluding ‘non-useable’ but ancillary/essential areas such as stairwells, WCs and permanent essential access routes. Most commonly used in the office and retail sectors.

Occupier

An occupier is determined as any company, freelancer or solo-preneur that occupies office space from 1 to 1000 desks. This relates to both flexible office space, managed office space and leased office space.

Operator

Any brand who runs or operates more than one co-working, flexible or managed workspace is classified as an operator. The majority of the time an operator may not be the overall landlord (owner) of the building. We call this the freeholder.

An operator may be the lessee and have a traditional lease on the whole building.

Parent Guarantee

Someone who signs onto a lease to help assure the landlord of the credit worthiness of the tenant.

Proptech

A board term used to describe real estate technology, which can include property management software, smart building technology, internet-connected utilities, and more.

Quiet Enjoyment

The right to use a space without undue disruption.

Rent

The consideration paid by the tenant to the landlord for the ability to occupy premises under a lease.

Rent Review

A rent review is a periodic review (usually five yearly) of rental value during the term of a lease.

Schedule of Conditions

A record of the condition of premises at the commencement of a lease. Usually appended to the lease and referred to in the Repairing and Yielding Up covenants to limit the tenant’s liabilities – typically to repair, keep and give back the premises in ‘no better than’ the condition than that evidenced by the schedule.

Service Charge

This is a charge by the Landlord for collectively running the building on behalf of the Tenants. The Service Charge is typically charged quarterly in advance (in the same way rent is).

Serviced Offices

An office space that offers a wide ranging set of hospitality offerings.

Space Agreement

A short-form contractual agreement used between tenant and serviced office occupier. A Space Agreement is often far shorter than a lease and requires little legal input.

Stamp Duty Land Tax SDLT

This is a Government fixed tax, chargeable on the execution of documents, pertaining to transactions such as Leases, Agreements for Leases and Conveyances.

Sub-Let

A sub-letting takes place when a tenant grants a new lease for their property, or part thereof, to an alternative occupier, for a period less than the residue of the tenant’s lease.

Tenant

The occupier of a space owned by a landlord, leased for a fee (rent).

Tenant Improvement Allowance

Tenant Improvements, sometimes called TI Allowance or TIA, is money that a building owner gives a tenant to build out their space, usually to help tenants mitigate cost.

Tenant’s Representative

An agent, usually a Surveyor, appointed by the Tenant to represent them in negotiations and/or third Party dispute resolution – Arbitration, Independent Expert or Court proceedings.

Term Sheet

A term sheet is a non-binding agreement that summarises key elements of an agreement between two or more parties.

Use Class

The category of Town Planning Use to which the current or intended use of a property is allocated, as defined in the Town and Country Planning (Use Classes) Order 1987. This is a Statutory Instrument and is subject to periodic variation and updating.

Vacant Possession

Vacant possession is a legal term denoting the empty state of a property on hand back to the landlord. Usually required in a lease the extent of compliance will be determined by the factual position at the date the premises are handed back.

Virtual Office

A service offered by a third party which enables a company to use an address for the purposes of mailing services.

White Box

A condition in which real estate space can be delivered in which the space is “paint-ready,” free of hazardous materials, and demolished to building shell condition. There are different types of whitebox delivery, which may or may not include lighting, HVAC, or finished perimeter walls.

WiredScore

An organization that offers a standardized rating of a building’s cable infrastructure and how well it is connected to the outside world. Buildings can be rated as “Certified,” “Silver,” “Gold,” and “Platinum.”

Yield

Return on investment (ROI), expressed in a percentage.

Office search glossary.

Searching for a new office space? We've put together a super-useful jargon-buster for those looking to relocate.

Alienation

The right to dispose of an interest in the property. These provisions outline a tenant’s ability to assign the lease, underlet or sub-let, or share occupation of the premises with another tenant.

Alterations

Alterations to any space are works carried out by an incoming tenant ahead of, or during their occupation. The majority of alterations will require landlord’s consent in the form of a ‘Licence for Alterations’. This should be granted by the landlord ahead of commencement of works.

Assignment

An assignment is the legal and contractual process of transferring a lease agreement and its responsibilities from one party to another.

Break Clause

A break clause (alternatively known as a ‘break option’ or ‘option to determine’) is a clause in a lease which provides the landlord or tenant with a right to terminate the lease before its contractual expiry date, if certain criteria are met. A break notice should be issued prior to the break within a time period set out in the lease.

Break Notice

A break notice is the formal notification that one party wishes to exercise its right to terminate the lease (a break clause). Break Notices must be served officially and correctly. The notice must be served the correct number of months before the break date.

Break Notice

A break notice is the formal notification that one party wishes to exercise its right to terminate the lease (a break clause). Break Notices must be served officially and correctly. The notice must be served the correct number of months before the break date.

Broker Commission

When you sign a space agreement with a flexible office operator, the operator pays the broker (us) a fee. It’s included within your desk or monthly rate. That’s how brokers work for occupiers ‘for free’.

Business Rates

Business rates, or non-domestic rates, are a tax on the occupation of commercial property and other non-domestic property. Properties are assessed in a rating list with a rateable value. Business rates are one of three costs that make up total occupational cost for traditional leased office space.

Business Improvement District

A business improvement district (BID) is a defined area within which businesses are required to pay an additional tax (or levy) in order to fund projects within the district’s boundaries

CapEx

Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company.

Covenant

A covenant in its most general sense, is a solemn promise to engage in or refrain from a specified action.

A tenant’s covenant strength refers to the quality of a tenant’s financial status and its ability to perform the covenants in the lease.

Co-working

Co-Working is a modern style of working in which several workers from different companies share a workspace, allowing cost savings and convenience through the use of common infrastructure, such as equipment, utilities, reception and meeting facilities.

Demise

Demised premises are the extent of the premises included within a lease and may include other facilities such as WCs or showers.

Depreciation

Depreciation is an accounting term that refers to the division of a cost over time based on the lifespan of an asset.

Dilapidations

The term ‘dilapidations’ refers to the breaches of a tenant’s lease covenants in respect of repair, reinstatement of alterations, and redecoration. Can be raised by a landlord during the term of the Lease (interim dilapidations) or, more commonly, at lease expiry (terminal dilapidations).

EBITDA

EBITDA is an abbreviation that stands for Earnings Before Interest, Taxes, Depreciation, and Amortisation. Generally a measure of a company’s net operating income.

Estate Charge

An estate charge is that part of the tenant’s service charge liability relating to the maintenance of the estate on which a commercial property is situated. Includes, for example, landscaping, maintenance and lighting of estate roads, as well as security.

Fit-Out

Fitting out is the process of building and furnishing your office ahead of occupation. This is only relevant with traditional leased offices as with co-working and managed workspace, this is either complete already or organised for an incoming tenant.

Properly have an in-house Projects team that can help you realise your new office from start to finish.

Fixed Desk

Fixed Desk is a term used by flexible office brands. A fixed desk is a permanent desk allocation in return for a monthly subscription. Fixed desks tend to be more expensive than Hot Desks which are more flexible and used by ‘nomadic’ workers.

Fully Repairing and Insuring Lease

FRI is a term used to describe a lease where the tenant is responsible for all repairs and for insuring. However, the term also applies to the liability for payment of these costs, known as effective FRI. FRI leases therefore include those where the landlord pays for external repairs and recovers the cost via service charge or contribution to “shared” expenditure. Also where, as is most common, the landlord maintains the insurance and recovers the cost of the premium from the tenant, usually as further rent.

Hot Desk

Hot desking, sometimes referred to as flex desking, refers to the practice of maximising utilisation rates of a workstation through the use of non-assigned desks. Workstations are therefore used on a first-come, first-served basis.

Headline Rent

A headline rent is the rent that is paid under a lease, after the end of any rent-free periods or any period of reduced rent. It creates an artificially inflated rent by ignoring the rent-free period, period of reduced rent or any other concessions the landlord may have given to the tenant in return for a higher headline rate. Headline rent is most commonly associated with open market lettings, but increasingly at lease renewal and lease re-gearing / restructuring. Headline rent usually also forms the benchmark for any “upward only” rent review in the lease.

Heads of Terms

A heads of terms agreement identifies and highlights the requirements of both the transacting parties in a property deal. Its advantage is that both parties will fully understand what they are subject to, and reduce or abolish any misunderstandings from each party. The heads of terms will form the basis of the contract and be forwarded to the parties’ solicitors to draft the contract or lease.

HVAC

A frequently used abbreviation for heating, ventilation, and air conditioning.

Incentive

An incentive is a payment that is used to encourage a tenant to take on a new leased office. A common example is where a landlord pays a tenant a sum of money to contribute to the cost of a tenant’s fit-out or allows a rent-free period.

Landlord

The owner of a property that is leased to a tenant.

Landlord’s Consent

Many clauses in commercial leases are “permissive”, and allow the tenant to implement changes or alterations to the property. Usually, however, the landlord’s formal consent is required, and the lease will contain provisions governing how this is to be obtained and documented.

Lease Renewal

A lease renewal is the renegotiation of a lease with an existing tenant who do not wish to vacate the building at their lease expiry.

License Agreement

Whilst traditional leased office space is subject to a contract (in the form of a lease), flexible operators ask members to sign up to License Agreements. These are far shorter, simpler contracts that require little to no legal review. Similar to a gym membership, there is a minimum term and then you can leave any time.

Managed Office

Managed Offices are sometimes confused with co-working and flexible offices. Whilst a Managed Office still provides a flexible workspace solution, the transaction time is generally longer than a typical flexible office. A Managed Office provider will provide a bespoke office for your requirements including fit-out, furniture, IT etc all for a monthly cost. Unlike co-working and other flexible office solutions, the space will be branded for your company and will typically have its own front door.

Net Effective Rent

The equivalent rent that would be payable after all incentives (for example capital contributions and rent free periods) are taken into consideration.This calculation is used by the VOA to determine the actual Rateable Value. It is also used in lease negotiations to identify the appropriate level of rent.

Net Internal Area

The ‘useable’ measured internal floor area of a building, which is measured to the internal face of external walls, by excluding ‘non-useable’ but ancillary/essential areas such as stairwells, WCs and permanent essential access routes. Most commonly used in the office and retail sectors.

Occupier

An occupier is determined as any company, freelancer or solo-preneur that occupies office space from 1 to 1000 desks. This relates to both flexible office space, managed office space and leased office space.

Operator

Any brand who runs or operates more than one co-working, flexible or managed workspace is classified as an operator. The majority of the time an operator may not be the overall landlord (owner) of the building. We call this the freeholder.

An operator may be the lessee and have a traditional lease on the whole building.

Parent Guarantee

Someone who signs onto a lease to help assure the landlord of the credit worthiness of the tenant.

Proptech

A board term used to describe real estate technology, which can include property management software, smart building technology, internet-connected utilities, and more.

Quiet Enjoyment

The right to use a space without undue disruption.

Rent

The consideration paid by the tenant to the landlord for the ability to occupy premises under a lease.

Rent Review

A rent review is a periodic review (usually five yearly) of rental value during the term of a lease.

Schedule of Conditions

A record of the condition of premises at the commencement of a lease. Usually appended to the lease and referred to in the Repairing and Yielding Up covenants to limit the tenant’s liabilities – typically to repair, keep and give back the premises in ‘no better than’ the condition than that evidenced by the schedule.

Service Charge

This is a charge by the Landlord for collectively running the building on behalf of the Tenants. The Service Charge is typically charged quarterly in advance (in the same way rent is).

Serviced Offices

An office space that offers a wide ranging set of hospitality offerings.

Space Agreement

A short-form contractual agreement used between tenant and serviced office occupier. A Space Agreement is often far shorter than a lease and requires little legal input.

Stamp Duty Land Tax SDLT

This is a Government fixed tax, chargeable on the execution of documents, pertaining to transactions such as Leases, Agreements for Leases and Conveyances.

Sub-Let

A sub-letting takes place when a tenant grants a new lease for their property, or part thereof, to an alternative occupier, for a period less than the residue of the tenant’s lease.

Tenant

The occupier of a space owned by a landlord, leased for a fee (rent).

Tenant Improvement Allowance

Tenant Improvements, sometimes called TI Allowance or TIA, is money that a building owner gives a tenant to build out their space, usually to help tenants mitigate cost.

Tenant’s Representative

An agent, usually a Surveyor, appointed by the Tenant to represent them in negotiations and/or third Party dispute resolution – Arbitration, Independent Expert or Court proceedings.

Term Sheet

A term sheet is a non-binding agreement that summarises key elements of an agreement between two or more parties.

Use Class

The category of Town Planning Use to which the current or intended use of a property is allocated, as defined in the Town and Country Planning (Use Classes) Order 1987. This is a Statutory Instrument and is subject to periodic variation and updating.

Vacant Possession

Vacant possession is a legal term denoting the empty state of a property on hand back to the landlord. Usually required in a lease the extent of compliance will be determined by the factual position at the date the premises are handed back.

Virtual Office

A service offered by a third party which enables a company to use an address for the purposes of mailing services.

White Box

A condition in which real estate space can be delivered in which the space is “paint-ready,” free of hazardous materials, and demolished to building shell condition. There are different types of whitebox delivery, which may or may not include lighting, HVAC, or finished perimeter walls.

WiredScore

An organization that offers a standardized rating of a building’s cable infrastructure and how well it is connected to the outside world. Buildings can be rated as “Certified,” “Silver,” “Gold,” and “Platinum.”

Yield

Return on investment (ROI), expressed in a percentage.

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