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Commercial Real Estate Glossary



Step-up lease

A lease in which the rental amount paid by the lessee increases by a preset rate or set dollar amount at predetermined intervals. A step lease is a means for the lessor to hedge against inflation and future maintenance or operational expenses.

Street-based mapping

Relatively easy-to-use GIS applications that allow the user to map objects such as commercial properties or retail establishments by street address.


A lease in which the original tenant (lessee) sublets all or part of the leasehold interest to another tenant (known as a subtenant) while still retaining a leasehold interest in the property. Also known as a sandwich lease due to the sandwiching of the original lessee between the lessor and the subtenant.


A segment or portion of a larger geographic market defined and identified on the basis of one or more attributes that distinguish it from other submarkets or locations.

Substitute basis

The basis in a property acquired in a qualified Section 1031 Exchange is reduced by deferred gain and becomes the substitute basis. For example, if the market value of property given up is $200,000, and the basis in that property was $75,000, then realized gain equals $125,000. Assume the market value of property acquired through a tax deferred exchange is $350,000, then subtracting the unrecognized gain of $125,000 equals the substitute basis of $225,000. The effect of this adjustment to basis is to build in the deferred $125,000 gain into the property acquired. If the new property were sold the next day for $350,000, a $125,000 gain would be reported.

Sunk costs

Investment costs that are committed and cannot be recovered.

Superregional center

A retail property type similar to regional centers, but because of its larger size, a superregional center has more anchors, a deeper selection of merchandise, and draws from a larger population base. As with regional centers, the typical configuration is as an enclosed mall, frequently with multilevels.


The amount of property that will be made available for sale or rent at a given price or rental rate.

Supply factors

Elements or forces that influence the supply of goods and services in a given market.

Supporting industries

Industries that offer goods or services that are necessary as inputs in a production process or for the transportation and marketing of intermediate or finished products.

Suspended losses

Passive losses that cannot be used in the current year are suspended for use in future years or at the time of sale.

Synthetic lease

A leasing and financing strategy whereby the terms of the lease under specific Financial Accounting Standard Board guidelines change the lease obligation from a capital lease (long-term lease on the company’s balance sheet) to an operating lease (short-term lease on the company’s balance sheet).

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