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.
