Hey everyone,

A new year is usually treated like a motivational poster. New goals. New energy. Big promises. In reality, the most valuable thing this time of year gives us is space to reassess what we already have in place. What is working? What is clunky? What we have been tolerating instead of fixing.

In commercial real estate, this matters more than most people realize. Small misunderstandings compound into expensive mistakes. Weak systems quietly drain time, cash flow, and trust. So instead of jumping straight into trends and predictions, it makes sense to go back to basics.

Let’s start with the fundamentals.

What is Commercial Real Estate?

Commercial real estate, or CRE, refers to property used for business purposes rather than residential living. The goal is income generation, whether through leasing, appreciation, or a combination of both.

In Florida, CRE generally falls into a few core categories:

Key Commercial Property Types:

• Office properties, including medical offices, professional suites, and corporate buildings.
• Retail properties such as strip malls, shopping centres, and standalone retail units.
• Industrial properties, including warehouses, distribution centres, and flex space. This sector has grown significantly due to logistics, e-commerce, and Florida’s port infrastructure.

Each of these asset types behaves differently. They attract different tenants, operate on different timelines, and respond differently to economic pressure. Treating them the same is one of the fastest ways to lose control of a portfolio.

What is a Triple Net Lease?

One of the most common terms you will hear in commercial leasing is NNN, or triple net.

A triple net lease means the tenant is responsible for three key expenses on top of base rent:

The three nets include:

• Property taxes
• Insurance
• Maintenance and operating costs

For landlords, this structure reduces risk and creates more predictable cash flow. For tenants, it offers transparency and control over the property they occupy.

In Florida, NNN leases are especially common in retail and single-tenant properties. Think national brands, quick service restaurants, pharmacies, and medical tenants. These tenants often prefer long-term leases and are willing to take on additional responsibilities in exchange for stability and location.

However, triple net does not mean hands off. Poorly defined lease language, vague maintenance clauses, or weak tracking systems can quickly turn a NNN lease into a management headache. Industry leaders obsess over clarity and documentation here because they know that assumptions cost money.

Back to Basics Means Back to Systems

At its core, commercial real estate is not just about property. It is about decisions. Decisions are only as good as the information behind them.

Going back to basics means asking honest questions.

The best companies revisit these questions on a regular basis. Not because something is broken, but because they refuse to wait until it is.

Sometimes progress starts by slowing down and getting the basics right.

Common Commercial Real Estate Terms You Should Know

Cap Rate (Capitalization Rate)

The cap rate is used to estimate a property’s potential return. It is calculated by dividing the net operating income by the purchase price or current market value. In Florida, cap rates vary widely depending on location, asset type, and tenant quality. Lower cap rates usually signal lower risk and stronger demand.

Net Operating Income (NOI)

NOI is the income generated by a property after operating expenses are deducted, but before debt service and taxes. This is one of the most important numbers in CRE. If NOI is weak or poorly tracked, every decision built on it is flawed.

Gross Lease

In a gross lease, the tenant pays a fixed rent, and the landlord covers most or all operating expenses. These are more common in office properties and can appear simpler, but they place more risk on the owner if costs increase.

CAM (Common Area Maintenance)

CAM charges cover shared property expenses such as landscaping, parking lots, lighting, and security. In Florida retail properties, CAM reconciliation is a frequent pain point. Strong operators track this monthly, not once a year.

Vacancy Rate

The vacancy rate reflects the percentage of unoccupied space in a property or portfolio. In fast-growing Florida markets, low vacancy can mask operational weaknesses, which only surface when demand softens.

Absorption Rate

Absorption measures how quickly available space is being leased in a given market. It is a useful indicator of demand and pricing power.

Back to basics means understanding these terms, but more importantly, building systems that track them accurately and consistently.

We hope this information serves as a strong entry point into commercial real estate. Whether you are just getting started or refining an existing portfolio, remember that your boutique property management company is here to support all your CRE needs with clarity, structure, and care.