As the commercial real estate industry evolves, so do the terms used to describe it.
NAIOP IS CURRENTLY in the process of updating “NAIOP Terms and Definitions: North American Office and Industrial Market.” This document is the result of a NAIOP Research Foundation project begun in 2004, and was subsequently updated, most recently in 2012. Its goal was “to define selected office and industrial real estate terms commonly used by owners, brokers, developers and others in their day-to-day business operations.” The resulting report (available for download at naiop.org/en/Research/Terms-and-Definitions) and alphabetical listing have become one of the most-viewed sections on the NAIOP website.
Since 2012, dramatic changes have taken place in the world of commercial real estate, including the growth of e-commerce, the sharing economy and automated vehicles. Terms like “experiential retail,” “co-working” and “walkability” have entered the CRE vernacular while other terms have fallen out of use or are being used in different ways, necessitating an updated document.
The new “NAIOP Terms and Definitions” will include new sections defining retail and investment terms, and will feature updated definitions of existing office and industrial vocabulary. Also included will be terms used to describe the development process, space use and availability, measurement, building materials, interiors and exteriors, transactions, leases and rental rates, building classifications and more.
Among the terms to be added are the following:
- M-commerce or mobile commerce: the buying and selling of products or services via non-tethered devices such as smartphones and tablets.
- Creative space: converted warehouse, industrial or office properties, typically made of brick and timber, with high ceilings and exposed ductwork that often cater to TAMI (technology, advertising, media and entertainment) tenants.
- Transit-oriented development (TOD): typically mixed-use residential and commercial areas designed to maximize access to public transportation.
These are just a few examples of new terms and draft definitions that are still under review for inclusion in the updated document.
Interviews with a wide range of experts and a synthesis of existing published materials from industry vendors such as CoStar and Xceligent, commercial real estate and investment firms including CBRE, Colliers, JLL, PGIM Real Estate and Savills Studley as well as other associations like the Appraisal Institute serve as the basis for the revised terms.
National research directors from major commercial real estate brokerage, data providers and investment firms discussed a draft version of the new document at their annual NAIOP Research Foundation-sponsored meeting in September. The directors broke into groups based upon their respective areas of expertise for a working session that resulted in a stimulating dialog and consensus around a number of terms and definitions. Their feedback is being incorporated into the updated document, which is scheduled to be released in early 2017.