MacRo LTD Blog

Commercial Real Estate and Land Glossary, Volume IV

Terms Brokers and Owners Might Not Know But Should, T through Z


To stay at the forefront of commercial real estate, consistent professional development and industry education are essential.

In Volume IV of our Commercial Real Estate and Land Glossary blog series, we pick up where we left off in Volume III by sharing some CRE terms you need to know to stay on top of your game.

Transferable Development Right

A development right that cannot be used by the landowner, or that the owner chooses not to use, but can be sold to landowners in another location; generally used to preserve agricultural land; may also be used to preserve historic sites or buildings and open space or to protect scenic features. TDRs are said to be transferred from a landowner in a sending district to the use of a landowner in a receiving district.

Triple Net (NNN)

A lease in which the tenant is responsible for all expenses associated with their proportional share of occupancy of the building.

Unimproved Property-Land

Potential site for development. No plans have been made to develop the land, but it is for sale to someone who would develop it for industrial, retail, or commercial use.

Vacancy & Collection Loss

An allowance for reductions in gross income attributable to projected vacancy (physical or economic) and/or potential collection loss considerations. Percent per year the units or spaces are vacant or rent is not received from delinquent tenants. This figure can vary up or down depending on market conditions.

Weighted Average Rent

The average rental rate for all spaces within a building or a market, with the average being skewed, or weighted, according to the size of the space available (the larger the space, the more that particular rental rate counts in the average). The weighted average is calculated by multiplying the square footage of each unit by its asking rental rate to obtain the total asking rent for each space, then totaling the rents for each space and dividing that sum by the total square footage for all units. Negotiable rental rates and rental rates of zero are excluded in this calculation.


(20,000 sf x $20/sf = $400,000) + (12,000 sf x $10/sf = $120,000) = $520,000 /32,000 sf= $16.25/sf

Zero Cash Flow Investment

is a highly-leveraged property with a long-term investment-grade triple net lease guaranteed by an investment-grade credit tenant. Typically, the lease term is 20 years or more with at least a BBB credit rating. The term “Zero Cash Flow” or “Zeros” refers to the fact that initially all of the property’s net operating income goes toward the loan payment.

We hope you found all of the terms in this four part blog series helpful.

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Rocky Mackintosh, the Founder and President of MacRo, Ltd., is a leading commercial real estate expert in the region.He has been an active member of the Frederick, Maryland community for over four decades. He has served as chairman of the board of Frederick Memorial Hospital and as a member of the Frederick County Charter Board from 2010 to 2012.


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