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FAQs
Commercial real estate isn’t simple, and the right questions matter.
This FAQ is designed to answer the hard-hitting and most frequently asked questions we hear from business owners, investors, and property owners navigating commercial real estate in Orlando.
What do “NNN,” “modified gross,” and “full service” actually mean?
NNN (Triple Net):
Tenant pays base rent plus: property taxes, property insurance, and common area maintenance (CAM)
Landlord payments are typically limited to ownership-level items.
Modified Gross:
Tenant pays base rent and some expenses (varies by lease)
Landlord pays property taxes and insurance.
Full Service:
Tenant pays one all-inclusive rent amount
Landlord pays property taxes, insurance, CAM, utilities, and janitorial (sometimes)
What down payment is typically required for a commercial purchase?
The typical down payment required is 30%.
Down payment is not the only cash needed. Buyers should also expect:
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Closing costs (2%–6%)
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Due diligence costs
What are the hidden or unexpected costs in a commercial deal?
In CRE (commercial real estate), the purchase price is only part of the cost, some unexpected expenses could be:
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Due Diligence & Pre-Closing Costs
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Property inspections (HVAC, building, roof, etc)
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Environmental reports
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Financing & Lending Costs
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Bank legal fees
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Operating & Ownership Costs (Often Overlooked)
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Deferred maintenance (fire systems, roof, parking lots)
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Property tax reassessment (after sale)
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Lease & Tenant-Related Costs
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Tenant improvement (TI) allowances
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Broker leasing commissions
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Post-Closing & “Surprise” Expenses
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Code compliance upgrades
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Fire sprinkler or alarm retrofits
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How do commercial real estate commissions work — and who pays them?
Leasing transactions:
Landlord pays the commission
Sales transactions:
Seller pays the commission at closing (typically)
What usually kills a commercial deal during due diligence?
Due dilligence can expose risks and additional expenses that the buyer did not anticipate. Here are some potential risks due diligence can expose:
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Environmental issues
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Phase I flags→ Phase II required
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Contamination
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Deferred maintenance
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Roof at end of life
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HVAC system failing
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Financing falls apart
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Appraisals come in low
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Tenant financials don’t qualify
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Lease problems
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Below-market rents with long terms left
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Leases don't match rent roll
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Zoning or use restrictions
Can I use a residential agent for a commercial deal?
Yes, you can—but it’s usually not a good idea.
Commercial deals are very different from residential, and that gap can cost you real money. A residential agent may lack experience with:
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LOIs
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Lease structures (NNN, modified gross, CAM reconciliations)
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Financial analysis (NOI, cap rates, rent rolls, pro formas)
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Due diligence timelines and contingencies
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Environmental issues, zoning, and use restrictions
How long does it take to close a commercial deal?
A commercial real estate deal typically takes 60–120 days to close, but the exact timing depends on the deal structure, property type, and complexity.