F

Free Rent: A concession granted to a tenant in the form of a partial or whole abatement of rent for a specified period of time as an inducement to enter into a lease. Items of rent which might be abated as a free rent concession include Base Rent, Expense Recoveries, Percentage Rent, Utilities Charges and CPI Adjustments.

EXAMPLE: To induce ABC Tenant to execute their lease, the Landlord provided Free Rent equal to 50% of the Base Rental payments for the initial 3 months of the 5 year lease term. During these 3 months, the monthly Base Rental payment per the Lease was $2,000. Because of the Free Rent, ABC Company is only required to pay $1,000.

G

GLA: Abbreviation for Gross Leasable Area, calculated as the summation of all rentable areas plus all common areas of a building.

Go Dark: A clause in a retail tenant's lease which allows a tenant to cease operations at a property if a defined event(s) should occur.

EXAMPLE: ABC Retail Tenant signs a lease at Ellipsis Mall that includes a Go Dark clause whereby if a) ABC's Gross Sales fall below $500,000 for two or more consecutive years; or b) if two of the three anchor tenants vacate their premises in the mall, then ABC may cease their operations at Ellipsis Mall.

Gross Lease: A lease type whereby the landlord is responsible for the payment of all recoverable expenses of the building. Such recoverable expenses are typically included in the calculation of Base Rent. In some Gross Leases, the tenant never pays a pro-rata share of recoverable expenses. In others, the tenant pays its pro-rata share of recoverable expenses over an Expense Stop.

EXAMPLE: ABC Tenant signs a five-year lease which requires ABC to pay Base Rent of $21.00/sq. ft. plus its proportionate share of recoverable expenses in excess of $9.00/sq. ft. This is an example of a Gross Lease, because the Landlord is responsible for the payment of the first $9.00/sq. ft. of recoverable expenses, and ABC is required to pay for recoverable expenses in excess of $9.00/sq. ft.

Gross Sales: The total of all sales made by a retail tenant. For tenants who have Percentage Rent clauses in their lease, Gross Sales are compared to the breakpoint to determine whether the tenant will be required to pay percentage rent. Leases may specify certain sales which may be excluded from Gross Sales (i.e., sales tax, discounts granted to employees, etc.).

Gross Sales Exclusions: Sales items which are excluded from the definition of Gross Sales within a lease in the computation of Percentage Rent.

Gross Sales Inclusions: Sales items which are included in the definition of Gross Sales within a lease in the computation of Percentage Rent.

Gross-Up: A lease clause that allows the landlord to increase recoverable expenses which vary with occupancy to an amount that would be incurred if a defined level of occupancy was achieved. Gross-up clauses typically allow the landlord to gross-up variable operating expenses to 95% or 100% occupancy.

EXAMPLE: ABC Tenant's lease allows the Landlord to gross-up variable operating expenses to 100% occupancy for expense recovery purposes. During the year, the average actual occupancy of Ellipsis Tower is 90%. The Landlord identifies Cleaning Expense as the only variable operating expense, and the actual cost for such year is $90,000. Due to the gross-up clause, the Landlord may include $100,000 in recoverable expenses for cleaning, reflecting a gross-up of the $90,000 actual cleaning expense to $100,000 ($90,000 divided by 90%).

Guarantors: A person or entity that agrees to perform the contractual obligations of another if the other party shall fail to so perform. Guarantors for lease obligations may either be personal or corporate.

EXAMPLE: ABC Tenant wishes to sign a lease at Ellipsis Tower. ABC is a new company with very little net worth. However, the owner of ABC, Rich Mann, is a wealthy individual. As security for entering into the lease, the Landlord requires that the owner execute a personal guaranty whereby Rich Mann agrees to personally pay any lease obligations of ABC in the event that ABC defaults on any of its monetary lease obligations. Rich Mann would be the Guarantor under the lease.