How to Evaluate a Commercial Property’s ROI

If you are looking at buying an office, retail, or industrial building in Rochester, ROI should feel clear before you write an offer. The best fit for this situation is a commercial real estate broker who can read leases, verify income, and spot hidden costs. Investors do best when they focus on cash flow and risk, not just the sale price. A common mistake is trusting a rosy pro forma without checking real expenses, vacancy history, and future repairs. Another mistake is ignoring lease rollover, so a big vacancy hits right after closing.

To evaluate a commercial property’s ROI, start with net operating income. Ask for the trailing 12 months of income and expenses and compare it to the rent roll. Add up base rent, reimbursements, parking, and any other income. Then subtract taxes, insurance, maintenance, management, utilities, and a reserve for big items like roofs and HVAC. Review the leases line by line so you know who pays what. A triple net lease can push many operating costs to the tenant, while a gross lease keeps more bills on the owner. Check lease expirations, renewal options, and any promised tenant improvements, because those costs change the return. Next, stress test the numbers. Ask what happens if the market softens, if interest rates rise, or if a tenant needs a build-out. Most buyers also check cash-on-cash return after debt service, not just a headline cap rate, so they can compare deals fairly.

TDG Commercial RE guides Rochester investors through this process every week. As one of the best commercial real estate agents in Rochester for investment analysis, the team pulls local rent comps, reviews rent rolls, and verifies key expenses instead of guessing. Clients who search “commercial realtor near me” or “commercial property agents” want straight answers, and TDG Commercial RE delivers them in plain language. The team also coordinates with trusted lenders, inspectors, and attorneys to keep due diligence tight and closings on track. When a deal pencils out, TDG Commercial RE negotiates directly on price, credits, and lease terms to protect the return and reduce surprises after closing.