Glossary   

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O
Occupancy Rate
The percentage of a defined market, submarket, or building that contains tenants.

Offer Letter
A non-binding representation by one party to act or perform in a specified manner provided that the other party acts or performs in the manner requested. An offer displays an intention to enter into a contract, as opposed to merely inviting offers from others, as with a listing contract.

Office Building
A building usually separated into individual offices, used primarily by companies to conduct business.

On-Site Improvement
The construction of a building or other developments within the boundaries of a property, thus increasing the property’s value.

On-Site Management
Those property management tasks that must be performed on the premises being managed.

Operating Expenses
Those recurring expenses that are essential to the continuous operation and maintenance of a property. Operating expenses are generally divided into the following categories: fixed expenses such as real property taxes and building insurance, variable costs such as utilities, payroll, administration and property management fees, and reserves for replacement. Operating expenses do not include items such as mortgage payments, certain capital expenditures and depreciation.

Option
An agreement to remain open, for a set period, an offer to sell or lease real property.