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Common Terms: Commercial Real Estate Glossary

Unlocking the Language of Commercial Real Estate

Welcome to our comprehensive Commercial Real Estate Glossary, your go-to resource for demystifying the terminology that surrounds the dynamic world of commercial property. Whether you're a seasoned investor, a budding entrepreneur, or a real estate professional, understanding the language of commercial real estate is essential for making informed decisions and navigating the market with confidence.

As experts in the Casper, Wyoming commercial real estate market, we know that knowledge is power. Whether you're considering an investment, negotiating a lease, or simply seeking to broaden your industry knowledge, our glossary is a valuable tool at your disposal.

If you have any questions or need further clarification on any term, our team at Cornerstone Real Estate is always here to assist you. We believe that an informed client is a successful client, and we're committed to helping you achieve your commercial real estate goals with confidence and expertise.

Most common commercial real estate terms

  • CAP Rate (Capitalization Rate): A metric used to estimate the potential return on an investment.
  • Net Operating Income (NOI): The total income from a property after operating expenses have been deducted, but before deducting taxes and interest. 
  • Triple Net Lease (NNN): A lease agreement where the tenant is responsible for paying the property's real estate taxes, building insurance, and maintenance, in addition to any normal fees. 
  • Gross Lease: A lease in which the landlord pays all or most of the property's expenses. 
  • Vacancy Rate: The percentage of all available units in a rental property, such as a hotel or apartment complex, that are vacant or unoccupied at a particular time. 
  • Loan-to-Value (LTV): A metric used in commercial real estate to assess the amount of mortgage lent, in relation to the appraised value of the property.
  • Amortization: Refers to the process of paying off debt over time in regular installments. 
  • Build-to-Suit: An arrangement where a developer constructs a building to a tenant's specifications. 
  • Common Area Maintenance (CAM): The amount of additional rent charged to the tenant, in addition to the base rent, to maintain the common areas of the property shared by the tenants and from which all tenants benefit. 
  • Due Diligence: The process where potential buyers or investors evaluate a property or commercial venture's financial potential and assess the risks involved before purchasing.