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Abatement (Rental) A reduction or
elimination of rent payments for a specified
period of time, usually granted by the
landlord as an inducement to the tenant to
enter into or to renew a lease.
Abatement (Tax) A reduction in real
property tax granted by a taxing authority
as the result of an appeal. In some
jurisdictions, tax abatements may also be
granted as an inducement for development
or to attract or retain job-providing
industries.
Above Market Rent Rent in excess of
that which a property most probably would
command if offered in the current market.
Above market rent may result from
existing leases which were negotiated at an
earlier time when market rents were
higher or may be the result of additional
benefits having been provided or being
provided by the landlord as an inducement
to the tenant to pay a higher rent. See:
Contract Rent; Effective Rent.
Above Standard Tenant Improvements
Additional tenant improvements, such as
cabinet work, wall coverings or luxury-
grade carpet, in excess of that provided in
typical space being rented at typical
market rent.
Absorption Rate 1) The rate at which
vacant space is either rented or sold to
users in the market place. Absorption rate
is usually expressed in square feet per year.
(e.g., since 1991, the Springfield suburban
office market has absorbed less than
150,000 square feet per year.) 2) The rate
at which a developer sells or expects to
develop or sell vacant land.
Abstract of Title A compilation of the
recorded documents relating to a parcel of
land, from which an attorney may give an
opinion as the condition of title. Still in
use in some states, but giving way to the
use of title insurance.
Acceleration Clause Clause used in an
installment note and mortgage (or deed of
trust), which gives the lender the right to
demand payment in full upon the
happening of a certain event, such as
failure to pay an installment by a certain
date, change of ownership without the
lender’s consent, destruction of the
property or other event which endangers
the security of the loan. See: Alienation
Clause.
Accrual Accounting Accounting method
in which income and expenses are charged
to the periods for which they are
applicable, rather than when actual
payment is received or made.
Acquisition Cost The total cost of
acquiring an investment property,
consisting of the purchase price plus other
costs of acquisition such as closing costs,
legal fees, title insurance, acquisition fees
and due diligence costs. Acquisition cost
includes only direct costs related to a
specific property acquisition and does not
include costs of running an acquisition
program such as general and
administrative costs, costs incurred in
analyzing proposals that are rejected, joint-
venture organization costs, et cetera.
Acre A measure, usually of land, equal to
160 square rods (43,560 sq. ft.) in any
shape.
Acre Foot A volume of water, sand, coal,
etc. equal to an area of one acre with a
depth of one foot (43,560 cubic ft.) If a
liquid, 325,850 gallons.
Actuarial Assumptions Statistical
assumptions made to determine the cost of
funding a pension plan, including expected
rate of return, mortality of plan
