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Property Decision Desk · Commercial

What Am I Really Looking At?

We're not a listing database, you've already got Crexi and LoopNet for that. This is the intelligence behind the deal, what the property type means, what the lease actually says, and what the numbers are really telling you.

Start Here

Know Your Property Type First

Everything else on this page changes depending on which one you're looking at.

01
Retail
Foot traffic, co-tenancy, and visibility drive value as much as the building itself. Anchor tenants matter more than square footage.
02
Office
Class A, B, or C matters enormously, and post-2020 demand shifts have made vacancy assumptions more important than ever.
03
Industrial
Ceiling height, loading access, and location relative to distribution routes often matter more than the building's age.
04
Warehouse
Similar to industrial, but evaluate storage configuration, column spacing, and dock door ratio specifically.
05
Small Multifamily
Five or more units shifts you into commercial financing and valuation, a meaningfully different game than residential investment.
06
Mixed-Use
You're really underwriting two or more property types at once. Don't let one strong component hide a weak one.
07
Land
Value depends entirely on zoning, utilities access, and what can actually be built, not on the dirt itself.

The Numbers That Matter Here

Five Metrics, Commercial-Specific

Some of this overlaps with straight investment analysis. Price and rent per square foot don't, and they're where a lot of commercial deals get misjudged.

NOI
Net Operating Income
Same principle as any income property, income minus operating expenses, before debt service.
CAP RATE
Cap Rate
Compare only against the same property type and submarket. Retail and industrial cap rates aren't comparable to each other.
$ / SF
Price Per Square Foot
The commercial equivalent of a comp. Only meaningful against similar property type, class, and location.
RENT / SF
Rent Per Square Foot
Tells you if current leases are at, above, or below market, which directly affects both risk and upside.
OCC.
Occupancy & Vacancy
Current occupancy matters less than the trend. Rising or falling, and why, tells the real story.

Before You Trust the Rent Roll

Lease Structure & Tenancy

Two properties with identical rent can have completely different actual returns depending on how the lease is structured.

NNN
Triple Net Lease
Tenant covers taxes, insurance, and maintenance. Landlord's income is closer to what's collected, fewer surprises, often lower headline rent.
GROSS
Gross Lease
Landlord covers operating costs out of collected rent. Higher headline rent, but expenses eat into it, and rising costs eat into NOI directly.
MOD.
Modified Gross
Costs split by agreement, sometimes clearly, sometimes vaguely. Read the actual lease, don't assume based on the label alone.
WALT
Lease Expiration Timing
Multiple leases expiring in the same window is real risk, even if current occupancy looks fine today.

A Real Fork in the Road

Owner-User or Investment?

These aren't just two ways to buy the same thing, they're two different questions.

OWNER-USER
Your Business Occupies It
The question: does this location serve my business well, and does owning beat leasing?
Financing often factors in your business's operating income, not just the property's. SBA loans and owner-occupied terms can apply.
Worth investigating: the real cost comparison against leasing, including what you give up in flexibility to relocate later.
INVESTMENT
Other Tenants Pay You
The question: does the income and appreciation justify the price and the risk?
Valuation centers on NOI and cap rate. Your own business has nothing to do with the deal, tenant quality and lease terms do.
Worth investigating: tenant concentration, lease expiration timing, and what happens to income if a major tenant doesn't renew.

Worth a Closer Look

What Deserves Extra Scrutiny

Tenant concentrationOne tenant representing a large share of income means their decision to leave is your biggest risk, not a footnote.
Clustered lease expirationsSeveral leases ending around the same time creates real re-leasing risk, even with solid current occupancy.
Zoning and use mismatchCurrent use should match what's actually permitted. A mismatch can complicate financing, insurance, or future sale.
Deferred capital expendituresRoofs, HVAC, and parking lots on commercial buildings are expensive. Confirm what's actually been maintained.
Below-market or above-market rentsEither direction changes your real return. Confirm current rents against actual comparable leases, not the pro forma.
Environmental historyPrior industrial or automotive use can carry environmental liability. Worth confirming before anything else.

Before You Talk to Anyone

Questions to Ask

Organized by who actually has the answer.

A Commercial Broker
  • What's actually trading in this submarket for this property type right now?
  • What's driving current asking rents, up, down, or flat, and why?
  • What would a realistic hold-and-exit timeline look like here?
A Property Manager
  • What's the real cost of re-leasing space if a major tenant leaves?
  • What capital expenditures are coming due in the next few years?
  • How does this compare to similar properties you actually manage?
Your Accountant
  • Does owner-user versus investment change my tax position meaningfully?
  • What does cost segregation or depreciation look like on this asset type?
  • Does the entity structure I'd use change based on financing terms?
Your Attorney
  • Do the existing leases actually say what the rent roll claims they say?
  • Are there any personal guarantees, options, or rights of first refusal in play?
  • What zoning or use restrictions apply, and are they consistent with current use?

What Now

Suggested Next Steps

Confirm the property type's specific evaluation criteria before applying general investment logic to it.
Verify current leases against the rent roll, don't take the summary at face value.
Check tenant concentration and lease expiration timing before evaluating income stability.
Decide owner-user versus investment early, it changes your financing and evaluation criteria.
Confirm zoning and permitted use match current operations before you assume anything.

Know Before You Close

Understand the Deal, Not Just the Listing

This framework is the free version. WHOOTC Real Estate Intelligence covers residential and commercial nationwide, organized into one report before you commit.

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