A single tenant triple net lease, often abbreviated as NNN lease, is a lease structure predominantly used in commercial real estate. This type of lease is an agreement where the tenant is responsible for all costs associated with the leased property in addition to the rent fee. These costs typically include the three nets: property…
A dark tenant is a tenant that has stopped operating at the property even though the lease may still be in place. In retail real estate, this can be a serious issue because the tenant may still be paying rent, but the space is closed, the lights are off, and the tenant is no longer…
Lease commissions are an essential part of commercial real estate transactions. They are paid to brokers for procuring tenants for rentable properties. The commission rates are agreed upon between the landlord and the broker and are usually a percentage of the total lease value. The calculation and payment of lease commissions are critical to the…
Leasing assumptions are an essential part of commercial real estate (CRE) analysis. They are the assumptions that define what happens after a tenant lease expires in a commercial property. Since it’s unknown whether the tenant will renew its lease or not, there are two sets of assumptions. One set of assumptions is used if a…
Ground leases are an essential component of the commercial real estate industry. A ground lease is a long-term lease where a tenant leases a piece of land from the landlord and then constructs a building on the property. During the lease term, the tenant has the right to use and develop the land, subject to…
Tenant improvements (TI) are a crucial aspect of commercial real estate. When a tenant moves into a new space, they often need to make modifications to suit their specific business needs. TI refers to the changes made to the rental space to accommodate the tenant’s requirements. These improvements may include anything from installing new fixtures…
A co-tenancy clause is a retail lease provision that gives a tenant certain rights if key tenants, anchor tenants, or a required percentage of the shopping center are not open and operating. In shopping centers, co-tenancy clauses matter because tenants often lease space based on the expectation that other tenants will help drive traffic. In…
Absorption is a term commonly used in commercial real estate (CRE) to indicate the rate at which available space is leased or sold within a specific market or geographic area during a given time period. Absorption rates are critical indicators of market demand and can be used to forecast future trends in the real estate…
Net Effective Rent (NER) is a term used in commercial real estate that refers to the actual amount of rent paid by a tenant over the lease term after accounting for any rent concessions or discounts offered by the landlord. It is a critical metric for both landlords and tenants, as it helps them to…
Commercial real estate is a complex field that involves multiple factors and variables that determine the profitability of an investment. One of the most important metrics for evaluating commercial real estate investments is net present value (NPV). NPV is a financial concept that measures the difference between the present value of all cash inflows and…
Acronyms and terms used by leasing brokers in commercial real estate can be overwhelming for those who are new to the industry. Understanding the key terms and phrases used in commercial leasing is essential for anyone who wants to lease or invest in commercial real estate. Brokers, landlords, and tenants use industry-specific language to describe…
Commercial real estate leasing can be a complex process, especially for those who are new to the industry. One of the most important terms to understand when leasing commercial property is NNN, which stands for “triple net lease.” This type of lease is common in commercial real estate and can have a significant impact on…