Glossary

Commercial Leasing Commission Glossary

Commercial leases are full of terms that quietly decide when a broker gets paid. A rent commencement date, a TI allowance, a holdover clause or a co-broke agreement can move a commission by months, or change its size. This glossary explains 62 of those terms for tenant rep and landlord rep brokers. Each one covers what the term means, how it affects your commission, and where to read more.

62 terms · Last reviewed October 2026

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Funding and payment

Assignment of commission

An assignment of commission is a written transfer of a broker's right to receive some or all of a commission to a third party, such as a commission advance company. It usually needs the brokerage's consent because the commission is typically owed to the firm first.

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Lease terms and deal stages

Assignment of lease

An assignment of lease is the transfer of a tenant's entire remaining interest in a lease to a new tenant, the assignee, who then deals directly with the landlord. Whether the original tenant stays liable, and what happens to commissions, depends on state law, the lease, and the agreements involved.

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Lease terms and deal stages

Base rent

Base rent is the fixed rent a tenant pays under a commercial lease, separate from additional rent such as operating expense pass-throughs, CAM charges, or percentage rent. Many commission agreements calculate the leasing commission on total base rent over the lease term.

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Lease terms and deal stages

Base year

A base year is the year whose actual operating expenses and taxes set the landlord's share of building costs in an office lease. The tenant then pays its pro rata share of increases above that base year amount in later years of the term.

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Space and measurement

BOMA standards

Floor measurement standards published by the Building Owners and Managers Association International that set how to calculate rentable, usable, and gross areas in office, retail, industrial, and other buildings. Leases often name which BOMA standard applies.

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Commissions and splits

Broker fee

A broker fee is the payment a broker earns for arranging a transaction. In commercial leasing the term is often used for the leasing commission itself, and the lease or brokerage agreement sets who pays it, how it is calculated, and when it is due.

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Commissions and splits

Broker of record

Broker of record has two common meanings: the licensed broker legally responsible for a brokerage firm and its agents, and the broker a client has formally designated in writing to represent it. In commercial leasing, both can affect who is paid a commission and how.

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Lease terms and deal stages

CAM charges

CAM charges are the common area maintenance costs a landlord passes through to tenants as additional rent, such as cleaning, landscaping, snow removal, parking lot upkeep, and security. Each tenant usually pays its pro rata share, with estimates reconciled against actual costs each year.

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Space and measurement

Cap rate

A ratio of a property's net operating income to its value, used to compare and value commercial real estate. Dividing NOI by the cap rate gives an estimated value, so the rent you lease space at flows directly into what a building is worth.

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Commissions and splits

Co-broke

To co-broke is to share a commission with another brokerage on the same deal. In commercial leasing it usually means the landlord's listing broker shares the leasing commission with the broker representing the tenant, on terms set in a written agreement.

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Commissions and splits

Co-listing

Co-listing is when two or more brokers or brokerages share one listing, jointly representing the owner and dividing the listing side of the commission. It differs from a co-broke, where the listing broker shares the fee with a broker representing the other party.

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Funding and payment

Commission advance

A commission advance is a payment a broker receives now in exchange for part of a commission that has been earned or is expected but not yet paid. The provider is repaid from the commission when it is paid, and the cost and recourse depend on the contract.

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Commissions and splits

Commission agreement

A commission agreement is the written contract that sets whether a leasing broker gets paid, how the commission is calculated, who pays it, and when it becomes payable. In commercial leasing it is often a short letter between the broker and the landlord.

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Commissions and splits

Commission cap

A commission cap is the most a broker pays their brokerage over a set period, usually a year. Once the cap is reached, the broker keeps all or nearly all of each further commission until the period resets, often minus some fees.

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Funding and payment

Commission disbursement authorization (CDA)

A commission disbursement authorization (CDA) is a document a brokerage sends to the party handling funds, such as a title or escrow company, telling it who receives commission payments and how much. It is signed by an authorized person at the brokerage.

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Commissions and splits

Commission split

A commission split is how a leasing commission is divided. It can mean the division between the landlord's broker and the tenant's broker on a deal, or the division between an individual broker and their brokerage. Both shrink the share of the gross fee you take home.

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Commissions and splits

Cooperating broker

A cooperating broker is a broker from another firm who works with the listing broker to complete a deal, usually by bringing in the buyer or tenant. In commercial leasing this is often the tenant rep broker, paid under terms set by the listing broker or landlord.

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Commissions and splits

Dual agency

Dual agency is when one broker, or sometimes two brokers at the same firm, represents both sides of the same transaction, such as the landlord and the tenant on a lease. Where it is allowed, it generally requires disclosure and written consent from both parties.

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Lease terms and deal stages

Early termination clause

A lease provision that lets a party, usually the tenant, end the lease before its scheduled expiration, typically by giving advance notice and paying a termination fee set out in the lease.

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Lease terms and deal stages

Escalation clause

An escalation clause is a lease provision that raises the tenant's rent over the term, either by fixed steps, by an index such as CPI, or by passing through increases in the landlord's operating costs. It shapes the total rent your commission may be based on.

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Lease terms and deal stages

Estoppel certificate

A signed statement in which a tenant confirms the key facts of its lease, such as rent, dates, deposits, and any defaults, so a buyer or lender can rely on them. Once signed, the tenant generally cannot later contradict those facts.

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Commissions and splits

Exclusive agency listing

An exclusive agency listing gives one broker the sole right to market a property, but lets the owner find a buyer or tenant directly without owing that broker a commission. It sits between an exclusive right listing and an open listing in how much it protects the broker.

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Lease terms and deal stages

Expense stop

An expense stop is a fixed dollar amount of operating expenses, usually stated per square foot, that the landlord pays under a lease. The tenant pays its pro rata share of any expenses above that amount, so the stop sets where tenant pass-through charges begin.

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Funding and payment

Factoring

Factoring is a financing method in which a business sells its unpaid invoices or receivables to a third party, called a factor, at a discount in exchange for immediate cash. The factor then collects the full amount from the party who owes it.

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Lease terms and deal stages

Full service gross lease

A full service gross lease is a lease, common in office buildings, in which the rent includes the building's operating expenses, taxes, insurance, and usually utilities. Increases above a base year or expense stop are typically passed through to the tenant as additional rent.

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Commissions and splits

Gross commission income (GCI)

Gross commission income (GCI) is the total commission a broker earns before the brokerage split, referral fees, and other costs are taken out. Brokerages use it to measure production and to track progress toward split tiers and commission caps.

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Space and measurement

Gross leasable area (GLA)

The total floor area designed for a tenant's exclusive use and occupancy, including basements, mezzanines, and upper floors. It is the measure most associated with retail and shopping centers, and it is the area that produces rent for the owner.

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Lease terms and deal stages

Gross lease

A gross lease is a commercial lease in which the tenant pays a single rent amount and the landlord pays the property's operating expenses, such as taxes, insurance, and maintenance, out of that rent. Because expenses are built in, the quoted rent is higher than a net rent for the same space.

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Lease terms and deal stages

Holdover tenant

A holdover tenant is a tenant that stays in its space after the lease term expires without signing a new lease. Leases often charge a higher holdover rent, and a holdover can delay the move-in of the next tenant, which can affect when a broker on that deal is paid.

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Commissions and splits

Landlord representation

Landlord representation is when a broker works for the property owner to market vacant space, find and screen tenants, and negotiate leases. The landlord rep is paid under a listing agreement, and often shares the leasing commission with the tenant's broker.

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Lease terms and deal stages

Lease commencement date

The lease commencement date is the date the lease term begins and the landlord's and tenant's rights and obligations under the lease take effect. It can differ from the signing date, the date rent starts, and the date the tenant moves in.

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Lease terms and deal stages

Lease execution

Lease execution is the point at which the landlord and tenant have both signed the lease and delivered it, making it binding. Many commission agreements use execution as the trigger for all or part of the leasing commission.

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Commissions and splits

Leasing commission

A leasing commission is the fee a broker earns for procuring a tenant for commercial space, generally paid by the landlord. It is commonly calculated as a percentage of total rent over the lease term, or as a dollar amount per square foot.

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Lease terms and deal stages

Letter of intent (LOI)

A letter of intent (LOI) is a short document in which a landlord and tenant set out the main business terms of a proposed lease, such as rent, term, and allowances, before the full lease is drafted. It is usually non-binding except for specific clauses.

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Commissions and splits

Listing agreement

A listing agreement is the contract in which a property owner hires a broker to market a property for sale or lease. In commercial leasing it sets the broker's exclusivity, term, commission schedule, how outside brokers are paid, and when the commission is due.

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Space and measurement

Load factor

The ratio of a tenant's rentable area to its usable area. It spreads a building's shared space, such as lobbies and corridors, across tenants, so a load factor of 1.15 means paying rent on 15 percent more area than the tenant exclusively occupies.

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Lease terms and deal stages

Modified gross lease

A modified gross lease is a middle ground between gross and net leases. The tenant pays a rent that covers some operating expenses, and pays some costs or its share of expense increases separately. The exact split varies from lease to lease.

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Commissions and splits

Net commission

Net commission is what a broker actually receives from a deal after the co-broker share, brokerage split, referral fees, and transaction fees are taken out of the gross commission. It is the figure that matters for your own cash flow and budgeting.

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Space and measurement

Net effective rent

The average rent a landlord actually realizes over the full lease term after subtracting concessions such as free rent and tenant improvement allowances. It shows the real economics of a deal behind the headline (face) rent.

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Space and measurement

Net operating income (NOI)

A property's income after operating expenses but before debt service, capital expenditures, depreciation, and income taxes. It measures how much the building earns from operations and is the starting point for valuing it with a cap rate.

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Lease terms and deal stages

Occupancy

Occupancy is when a tenant actually takes possession of and uses the leased space. In commission agreements it is a common payment trigger, and it often depends on build-out being finished and, for many spaces, a certificate of occupancy being issued.

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Commissions and splits

Open listing

An open listing is a non-exclusive agreement in which a property owner lets several brokers market the same space and pays a commission only to the broker who actually brings the tenant or buyer. If the owner finds the party alone, no commission is owed.

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Lease terms and deal stages

Percentage rent

Percentage rent is rent based on a share of the tenant's gross sales, usually paid on top of base rent once sales pass a set breakpoint. It is common in retail leases, and because it is unknown at signing, whether it counts toward a commission depends on the agreement.

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Space and measurement

Price per square foot (PSF)

The rent or price stated per square foot of space. Commercial lease rates are commonly quoted as an annual dollar amount per square foot, which is multiplied by the space's square footage to get annual rent.

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Lease terms and deal stages

Pro rata share

Pro rata share is the percentage of a building's shared costs a tenant pays, usually its rentable square feet divided by the building's total rentable square feet. It sets how much CAM, tax, and operating expense pass-through the tenant owes as additional rent.

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Commissions and splits

Procuring cause

Procuring cause is the principle used to decide which broker earned a commission when more than one claims it. Generally, it is the broker whose efforts started an unbroken chain of events that led to the completed deal. How it applies varies by state and by contract.

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Funding and payment

Receivable purchase

A receivable purchase is a transaction where a buyer pays cash now for the right to collect money someone else owes later, such as an earned commission. Whether it is legally a true sale or a disguised loan depends on how the contract allocates risk.

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Funding and payment

Recourse vs non-recourse

Recourse and non-recourse describe who bears the loss when a payment that secures a deal is never made. With recourse, the funder can come back to you for the shortfall. Without recourse, the funder looks only to the asset and absorbs the loss.

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Commissions and splits

Referral fee

A referral fee is a share of a commission paid to a licensed broker for referring a client to another broker who completes the deal. It is usually a percentage of the commission, paid broker to broker under a written agreement, and state rules generally bar paying it to unlicensed people.

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Lease terms and deal stages

Renewal option

A renewal option is a tenant's contractual right, but not obligation, to extend its lease for an additional term on terms set in the lease. Whether a broker earns a commission when the option is exercised depends on the commission agreement.

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Lease terms and deal stages

Rent abatement

Rent abatement is a period during a commercial lease when the tenant pays reduced rent or no rent while it has possession of the space. It is often a negotiated concession, and whether abated months count toward your leasing commission depends on your commission agreement.

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Lease terms and deal stages

Rent commencement date

The rent commencement date is the date a tenant must start paying rent. It often falls weeks or months after the lease commencement date because of free rent, build-out time, or other concessions, and some commission agreements tie payment to it.

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Space and measurement

Rentable square feet (RSF)

The area a tenant pays rent on: its usable square feet plus a proportional share of the building's common areas such as lobbies, corridors, and restrooms. Office rent is usually quoted per rentable square foot.

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Lease terms and deal stages

Right of first offer (ROFO)

A lease or contract right that requires the owner to offer space or a property to the holder, often an existing tenant, before marketing it to anyone else. If the two sides do not agree within the set time, the owner can go to the market.

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Lease terms and deal stages

Right of first refusal (ROFR)

A contractual right that lets the holder, often an existing tenant, match a deal the owner has negotiated with a third party, on the same terms, before the owner can complete that deal with the third party.

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Lease terms and deal stages

SNDA

A three-part agreement among a tenant, a landlord's lender, and often the landlord: the tenant subordinates its lease to the loan, the lender agrees not to disturb the tenant after a foreclosure, and the tenant agrees to recognize a new owner.

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Lease terms and deal stages

Sublease

A sublease is a lease by an existing tenant of all or part of its space to a new party, the subtenant, for a period shorter than the tenant's own remaining term. The original tenant stays liable to the landlord, and sublease commissions are governed by their own agreement.

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Lease terms and deal stages

Tenant improvement allowance (TI)

A tenant improvement allowance is money a landlord agrees to contribute toward building out or customizing leased space for a tenant, usually stated as a dollar amount per square foot or a lump sum. Costs above the allowance generally fall on the tenant.

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Commissions and splits

Tenant representation

Tenant representation is when a broker works for the tenant, not the landlord, helping a business find space, compare options, and negotiate lease terms. The tenant rep broker is usually paid out of the leasing commission the landlord pays, as set by the commission agreement.

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Lease terms and deal stages

Triple net lease (NNN)

A triple net lease is a commercial lease in which the tenant pays base rent plus the property's real estate taxes, building insurance, and maintenance, the three "nets." Because these costs sit outside base rent, the base rent on a NNN deal is lower than a comparable gross rent.

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Space and measurement

Usable square feet (USF)

The floor area a tenant actually occupies and controls inside its premises, excluding shared building areas like lobbies, restrooms, elevators, and common corridors. Usable area is the starting point for calculating rentable area.

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Lease terms and deal stages

Work letter

A work letter is the part of a commercial lease, usually an exhibit, that spells out who builds the tenant's improvements, who pays, how the allowance is disbursed, and what schedule applies. It often controls when the space is delivered and when rent starts.

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