Capital expenditure
Investment in renewal, replacement or technical improvement. AUDICO links it to a specific finding, priority and the period in which intervention is likely to be required.
DECISIONS / REAL ESTATE
Terms for clear decisions.
Concise explanations of technical, operating and investment terms used in the acquisition, financing and management of commercial real estate.
AUDICO GLOSSARY
This is not a generic real-estate dictionary. Each term is explained through its relevance to condition, documentation, cost or decisions about a building. Definitions are original AUDICO content.
Operating expenditure
Recurring costs for energy, servicing, maintenance, management and statutory inspections. The audit considers whether defects, neglected maintenance or inefficient systems are driving them upward.
Net operating income
Property operating income before financing, tax, depreciation and CAPEX. Technical findings may affect it through OPEX, downtime or the sustainability of rental income.
NOI = operating revenue − operating expenses
Technical due diligence
A technical review before acquisition, financing or another major decision. It connects condition, documentation, compliance, service life, risk and future cost.
Material risk
A finding with a potentially material impact on safety, permitted use, price or transaction feasibility. It is separated from ordinary defects in the report.
Data room
A secure, controlled repository of documents shared with transaction participants, often called a virtual data room (VDR). For TDD, a document's presence in the data room is not enough: we verify its currency, completeness and consistency with actual building conditions.
Non-disclosure agreement
Rules protecting confidential information and deliverables. They define authorised users, permitted purpose and conditions for further disclosure.
Remaining service life
An estimate of how long an element can perform its required function with appropriate maintenance. It is not a warranty; it is a planning input for renewal and CAPEX.
Capitalisation rate
The ratio of annual NOI to an asset's value or price. Technical risk does not set it directly, but may affect expected NOI, price and perceived risk profile.
Leasable areas
Area measures used in leasing. Their content is not universal: the lease definition and measurement standard govern. AUDICO compares lease data, drawings and actual conditions.
DETAILED EXPLANATION →Common-area factor
A factor allocating a share of common areas to exclusively occupied space. Review requires the calculation basis, included areas and the wording of the lease.
DETAILED EXPLANATION →Lease schedule
A structured schedule of spaces, tenants and principal commercial terms. In TDD it maps leases, areas, actual use and obligations for comparison.
Service charges
Costs of agreed services and common operation passed to tenants under the lease mechanism. Technical condition affects their level, predictability and future reconciliation.
Tenant fit-out
Construction and system alterations for a specific occupier. The audit considers approvals, quality, ownership, interfaces with base-build systems and future removal obligations.
Base-build condition
The part of a building delivered without final tenant works. The precise standard must be defined by the lease or technical schedule; the label alone does not establish readiness.
Reinstatement obligation
An obligation to return premises at lease end to the condition defined by the lease. A technical survey can record the works and estimate cost; the legal scope comes from the contract.
Planned preventive maintenance
A schedule of inspection, servicing and replacement before failure occurs. Its quality affects reliability, system life and OPEX stability.
Deferred maintenance
Work not performed when technically due. Accumulation may accelerate deterioration, increase failures and turn routine OPEX into larger CAPEX.
Weighted average unexpired lease term
A timing measure of lease stability weighted by a selected metric, such as rent. The methodology must be stated. Technical condition may influence renewal and landlord obligations during the term.
Effective rent
The economic rent after agreed incentives and contributions. For investment analysis it helps distinguish the headline rate from income that genuinely supports NOI.
Gross External Area
Gross area measured to the external perimeter of a building or floor. Treatment of walls, balconies and technical areas depends on the selected standard, so the report should state both methodology and measurement date.
DETAILED EXPLANATION →Gross Internal Area
Gross area measured to the internal face of the perimeter enclosure. It is used for technical and cost comparisons; the adopted method determines how shafts, atria and voids are treated.
DETAILED EXPLANATION →Net Internal Area
Net internal area available for functional occupation after deductions required by the selected standard. It is not automatically the same as leasable or billable area.
DETAILED EXPLANATION →Gross floor and built-up area
GFA and BUA describe aggregate floor area or a building's developed footprint, but their scope varies by jurisdiction and project. The abbreviations should never be treated as interchangeable without a documented definition.
DETAILED EXPLANATION →Area measurement standard
A family of methods for measuring and allocating space by property type. A review should identify the exact standard version, building category and allocation method for common areas.
DETAILED EXPLANATION →Billable area
The area used under the contract to calculate rent or another charge. It may combine exclusive space with an allocated share of common areas, so its calculation should be fully traceable.
DETAILED EXPLANATION →Usable floor area
Area that can practically serve its intended function. Legal, design and commercial definitions may differ, so TDD identifies the data source and the purpose for which the figure is used.
DETAILED EXPLANATION →Intermediate floor
An intermediate level between principal floors. Review focuses on load capacity, fire safety, escape routes, approvals and consistency between actual use and documentation.
Latent defect
A defect that could not reasonably be identified during an ordinary inspection. Even thorough TDD cannot eliminate every hidden condition; targeted testing, opening-up and document review reduce uncertainty.
Energy performance certificate
A document rating energy performance under a prescribed calculation method. It is not the same as an energy audit or actual consumption; sound decisions compare all three views.
Sustainability certifications
Rating systems for environmental and operational building performance. A certificate must be read with its scheme version, rating level and scope; it does not by itself confirm defect-free technical condition.
Triple Net Lease
A lease model under which the tenant assumes specified taxes, insurance and operating or maintenance costs. The allocation is never automatic: the contract and local law govern.
Sale and leaseback
A transaction in which the owner sells the property and continues to occupy it as tenant. Technical review helps allocate future CAPEX, OPEX, maintenance and handback obligations between the parties.
Loan to Value
The ratio of a loan to the recognised value of the property. Technical findings do not set it directly, but may affect collateral value, reserves, drawdown conditions or required CAPEX.
Vacancy rate
The share of unoccupied space against a defined area base at a stated date. The denominator must be disclosed; technical readiness affects both the time and cost required to re-let the space.
Land-use controls
Rules governing permitted use and spatial limits for a site. TDD compares intended use with available approvals and records; binding legal interpretation remains with the competent authority or legal adviser.
International Property Measurement Standards
An international standard for consistent building measurement and cross-market comparison. The report should state the exact measurement basis and area boundary; IPMS may also be used alongside national or contractual methods.
DETAILED EXPLANATION →Total expenditure
CAPEX and OPEX combined over a defined life-cycle period. It helps compare options where a lower initial investment may not produce lower total cost; the result depends on the time horizon, discount rate and included cost scope.
TOTEX = CAPEX + OPEX
Core refurbishment (Kernsanierung)
A deep refurbishment in which a building, or part of it, is typically stripped back to its load-bearing structure before layouts, envelope, building services and finishes are renewed. The term has no universally fixed scope, so TDD verifies which elements and systems were actually replaced, when the work was completed and what evidence supports it. The label ‘Kernsanierung’ alone does not prove that the whole building was renewed.
Note: the meaning of some terms depends on the lease, measurement standard or financial model. This glossary explains their technical and decision context; it does not replace legal, accounting, tax or investment advice.
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