14 Commercial Real Estate Terms Every Investor MUST Know

Commercial real estate terms can be hard to understand, even as a residential real estate investor. You may get on a call with a commercial real estate broker, only to have the faintest idea of what they’re trying to tell you. Terms like DSCR, cap rate, and triple net are often brand new terms to those just getting started in commercial real estate. But don’t let the jargon scare you, these terms are actually quite simple when you know what they mean.

Tyler Cauble felt this jargon-induced headache early on in his commercial investing career. Since then, he’s become fluent in CRE-speak and is able to quickly tell you exactly what different underwriting, lease, and property terms mean. Don’t start off your commercial real estate investing journey on the wrong foot. Let Tyler walk you through fourteen of the most common commercial real estate terms so you not only look smarter but invest smarter.

Have any other terminology you’re perplexed by? Let us know in the comments below, we’ll try our best to give you a digestible definition!

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Check out Last Week’s Episode on How to Buy Commercial Property with NO Money:
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Connect with Tyler on BiggerPockets:
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Commercial Real Estate Vocabulary 101 – Part 1:
https://www.biggerpockets.com/blog/2010-09-20-commercial-real-estate-vocabulary-101-part-1?utm_source=youtube&utm_medium=description&utm_campaign=none
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Everything You Need to Know About Triple Net Leases:
https://www.biggerpockets.com/blog/triple-net-leases-commercial-real-estate?utm_source=youtube&utm_medium=description&utm_campaign=none
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The Newbie’s Real Estate Dictionary:
https://www.biggerpockets.com/blog/2015-08-28-16-investing-terms-newbie?utm_source=youtube&utm_medium=description&utm_campaign=none
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Subscribe to Tyler’s YouTube Channel:
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Follow Tyler on Instagram:
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00:00 Explaining the CRE Jargon
00:54 The Language of Commercial Real Estate
01:18 1. Net Operating Income (NOI)
01:48 2. Debt-Service Coverage Ratio (DSCR)
02:47 3. Capitalization Rate
03:54 4. Return on Investment (ROI)
04:31 5. Commercial Cash-Out Refinance
04:59 6. Price Per Sqft/Unit
06:05 7. Building Classification
07:25 Commercial Lease Terms
07:37 8. Triple Net Lease (NNN)
08:25 9. Full Service Gross (FSG)
09:04 10. Modified Gross Lease (MG)
09:42 Lease Clauses
09:55 11. Sublease Clause
10:33 12. Exclusivity Clause
11:14 13. Rent Escalation Clause
11:47 14. Delivery Conditions