Commercial property types, lease structures, and cap rate analysis concepts distinct from residential real estate licensing.
35 cards · basic cards · AI-written, checked twice. Edit anything.
- What does NNN stand for in commercial real estate?
- Triple Net
- In a triple net lease, who pays property taxes, insurance, and CAM?
- The tenant
- What is a gross lease?
- Tenant pays one rent amount; landlord covers most operating expenses
- What is a modified gross lease?
- A hybrid lease where tenant and landlord share certain operating expenses
- What is percentage rent?
- Tenant pays base rent plus a percentage of gross sales revenue
- What is cap rate, also called capitalization rate?
- Net Operating Income divided by property purchase price
- How do you calculate NOI (Net Operating Income)?
- Gross rental income minus operating expenses
- What does a higher cap rate generally indicate?
- Higher risk or lower property value relative to income
- What is DSCR (Debt Service Coverage Ratio)?
- Net Operating Income divided by total annual debt payment
- What is LTV (Loan-to-Value ratio)?
- Loan amount divided by property value, expressed as a percentage
- What is cash-on-cash return?
- Annual cash flow divided by the initial cash investment
- What is multifamily property?
- Residential buildings with 5 or more units
- What is industrial property in commercial real estate?
- Warehouses and distribution centers used for manufacturing, storage, or logistics
- What is retail property?
- Commercial property used for selling goods or services directly to consumers
- What is office property in commercial real estate?
- Space leased to businesses for administrative, professional, or corporate operations