Commercial Real Estate, Explained

Plain-English reference material on how commercial real estate is leased, valued, financed and measured — 10 explainers across 4 subject areas.

Leasing

How commercial leases are structured, quoted and reconciled.

Triple Net (NNN) Leases Explained — What a tenant actually pays under NNN, how it differs from gross and modified gross, and why the quoted rate alone tells you almost nothing.
Rentable vs Usable Square Feet and the Load Factor — You pay rent on rentable area but you occupy usable area. The gap between them is the load factor, and it is negotiable more often than tenants realise.
TI Allowances, Free Rent and Net Effective Rent — Concessions are how landlords cut the real price without cutting the headline rate. Net effective rent is the only figure that reconciles them.

How income-producing property is valued, underwritten and traded.

Cap Rates: What They Measure and What They Hide — The capitalisation rate is one year of income divided by price. That simplicity is its usefulness and its danger.
How to Read Sale Comparables Without Fooling Yourself — Comparable sales are evidence, not answers. Adjusting them honestly is most of the appraisal.
Absorption, Vacancy and Availability: Reading Market Fundamentals — Four statistics decide whether a market has pricing power. Three of them are routinely confused with each other.

Debt structures, sizing constraints and what lenders actually test.

LTV, DSCR and Debt Yield: The Three Constraints That Size a Loan — A commercial mortgage is sized by whichever of three tests binds first. Knowing which one binds tells you what to fix.
Reading a Loan Maturity Schedule for Risk and Opportunity — Maturity data is the most actionable dataset in commercial real estate, for lenders and for anyone hunting distressed opportunity.

How CRE market statistics are constructed and where they break.

Where Commercial Real Estate Data Actually Comes From — Five source families, each with a different refresh cadence, licence position and failure mode.
Why Two Providers Disagree About the Same Submarket — Submarket boundaries are editorial decisions. Comparing a statistic across providers usually means comparing two different geographies.