Glossary of Industrial Real Estate Terms

Below are some common real estate terms pertaining to warehouse space in Denver.  You may also want to visit our Frequently Asked Denver Industrial Real Estate Questions page for more information.  Or please feel free to call our office and one of our industrial real estate and warehouse specialists will be happy to help you – 303-295-2525.

  • Base Year – the calendar year in which the lease begins. This terminology usually refers to expenses that are included in the rent for the first year of the lease.  If costs go up in subsequent years, the lease will provide that the tenant will pay its share of increases over the (first year) base year expenses, which usually include taxes, insurance, and common area maintenance.
  • CAM or CAC– these letters stand for Common Area Maintenance or Common Area Costs, which usually includes all exterior maintenance and repairs such as parking lot cleaning, exterior lighting, snow removal, exterior painting and cleaning, landscape maintenance, etc.  Sometimes people use the term “CAM expenses” to refer to common area maintenance plus taxes and insurance, which are the three categories of expenses for a triple net (or NNN) lease.
  • Clear Height – The usable height in the building, clear of any obstacles, from the floor to the bottom of the lowest roof joist.
  • Dock High – Overhead door and loading at the level of a semi-truck bed.
  • Drive In – Ground level access and loading.
  • Eminent Domain – No matter who legally owns a property, any city, state, county or federal government has the right to take the property for a public use, so all industrial leases in Denver have a provision covering that possibility.  However, it is very rarely used.
  • Gross Lease – Denver warehouse space leases that are considered “gross leases” include all expenses in the monthly rental rate with no additional expenses billed back to the tenant.  With a gross lease, as with all industrial leases, the tenant is responsible for its own utilities.
  • High Cube – High cube warehouse space is industrial space designed to maximize storage capacity with open floor plans and high ceilings, typically at least 20 feet in height.
  • Modified Gross Lease – With a modified gross lease, in addition to base rent, the tenant participates in its share of building expenses such as taxes, insurance and common area maintenance if these expenses go up over the base year, which is the first year of the lease.
  • Rail Served – the building is adjacent to a rail line with a spur to the building, providing the ability to load and unload rail cars from the building.
  • Right to Relocate – Many warehouse leases include a provision that gives the landlord the right to relocate a tenant– usually within the same complexat the landlord’s expenseThis provision is rarely exercised but it may become necessary if, for example, a smaller tenant occupies space between two vacant spaces, which interferes in the ability to combine the spaces for a large user.
  • Subrogation – This is an insurance term that allows an insurance company to pay a loss to the covered party but pursue reimbursement from a third-party who might have been at fault.
  • Triple Net or NNN Warehouse Leases provide that the tenant is responsible for all costs associated with their warehouse space or building including taxes, insurance, and maintenance. For a multi-tenant building, these expenses are apportioned to the tenants based on their square footage.

Questions? Ask away.