Industrial Real Estate Glossary: 40 Terms

Listings and lease forms use these words loosely. When a term matters to a decision, do not stop at the definition.

1. Find the term here to understand the general idea.
2. Look for how your lease or proposal defines it, since that wording controls.
3. Ask for the actual measurement or document behind any claim on a marketing sheet.
4. Take technical and legal questions to the right professional before relying on the answer.

• Warehouse: a building made mainly for storage and distribution of goods.
• Flex space: commercial property combining warehouse or industrial area with office or showroom space under one roof.
• Light industrial: property zoned or built for lower-impact production, assembly, storage and distribution. Local zoning codes set the actual rules.
• Distribution center: a facility focused on moving goods out to customers or stores, instead of holding them for long periods.
• Cold storage: a temperature-controlled facility for perishable or sensitive goods, kept refrigerated or frozen.
• Co-warehousing: a shared model in which small businesses rent space and share docks and equipment with others.
• Mezzanine: an intermediate floor built between the main floor and the ceiling, adding usable area without enlarging the footprint.
• Single-tenant building: a building leased to one occupier. In these leases, the tenant typically takes on nearly all maintenance, repair and replacement.

• Clear height: the usable vertical distance from the floor to the lowest overhead obstruction, such as a beam, joist or sprinkler. It is not the height to the roof.
• Slab-on-grade: a concrete floor supported directly by the ground below, and the surface that carries rack loads.
• Pallet position: one place in a rack or on the floor that holds one pallet. It is the basic unit for sizing storage.
• Rack post load: the concentrated force a rack column applies to the floor. It comes from pallet weight and the rack layout.
• Bay: the section of rack between two uprights. Bay also commonly means one unit or section of a building.
• Load plaque: a sign posted on or near a rack showing its permitted loads. The RMI's ANSI MH16.1 standard calls for one, according to rack engineers Damotech.
• FF and FL numbers: measures of floor flatness and levelness under ASTM E1155, used for randomly trafficked floors. ASTM says they are not to enforce tolerances on fixed-path floors such as narrow aisle warehouses.

• Dock-high door: a loading door raised above the truck court, often 48 to 52 inches, so trailers can back up and load at floor level.
• Grade-level door: a door at ground level that vans, box trucks and forklifts can drive through. It is also called a drive-in door.
• Ramp door: a dock-high door converted to drive-in use with a ramp from the ground to dock level.
• Truck court: the paved area outside the doors where trucks maneuver and back into position.
• Dock leveler: equipment that bridges the height difference between the dock and a truck bed, built into the floor or stored vertically.
• Dockboard: OSHA's term for a portable or fixed device spanning a gap between a dock and a vehicle, including dock plates and levelers.
• Dock bumper: padding, typically rubber, that absorbs a truck's impact against the building.
• Cross-dock: a practice or building layout in which goods go from inbound to outbound trucks with little or no storage in between.

• High-piled storage: combustible storage above a height set by the fire code. Some jurisdictions need a permit so officials can verify protection matches the storage. Your fire official decides what applies.
• ESFR sprinkler: Early Suppression Fast Response, a sprinkler type for high storage, with coverage and design rules of its own in NFPA 13, according to Consulting-Specifying Engineer. Your fire protection engineer and insurer decide what a building needs.
• Three-phase power: a method of power delivery, often at 208, 240 or 480 volts, that much industrial equipment uses. The equipment's nameplate says what it needs.
• Service size: the capacity of the building's electrical service, stated in amps at a given voltage. Both numbers matter.

• Triple net (NNN): a lease in which the tenant pays base rent plus its share of real estate taxes, property insurance and maintenance. The label is used loosely, so read the definitions.
• Absolute net (bondable lease): a lease in which the tenant bears nearly everything, including casualty and condemnation risk.
• Common area maintenance (CAM): the tenant's share of the costs of operating and maintaining shared parts of a property, such as parking lots and landscaping.
• Pro rata share: the tenant's percentage of shared costs, usually its square footage divided by that of the building or project.
• Reconciliation: the year-end comparison of the estimates a tenant paid with the landlord's actual costs.
• Capital expenditure: a major item, such as a roof replacement, that lasts well beyond one year, as opposed to routine maintenance.
• Amortization: spreading a capital cost across its useful life, so that a tenant pays only for the part that falls within its term.

• Sublease: an agreement in which an existing tenant rents space to another. The subtenant's rights come from, and depend on, the master lease.
• Master lease: the lease between the landlord and the tenant that is subleasing. It is also called the prime lease.
• Recognition agreement: a document in which the master landlord agrees that a subtenant may stay if the tenant defaults. It is rarely offered without an economic reason.
• License: a permission to use another's property, generally revocable, as distinct from a lease that gives exclusive possession. State law and the agreement's actual terms decide which one you have.
• Bailment: the legal relationship in which a warehouse holds goods for someone else without taking title.
• Warehouse lien: a warehouse's right, under the model Uniform Commercial Code, to a claim on stored goods for its unpaid charges. It can be waived, and states adopt their own versions.

Tenant Advisory Group represents tenants and buyers, and part of the work is translating this vocabulary into plain questions about what a building can do and what a lease will cost you.