Most people assume a good commercial real estate deal should be obvious.
Low rent. Clean numbers. Easy comparisons.
In reality, many of the best deals look mediocre, or even bad when judged strictly on paper. That’s because spreadsheets reward simplicity, while real commercial real estate outcomes are driven by structure, timing, and risk.
Here’s why that gap exists.
What “Good” Looks Like on Paper
When evaluating a commercial real estate deal, most people default to a short list of metrics:
- Asking rent
- Price per square foot
- Headline lease terms
- Side-by-side comparisons with other listings
These numbers feel objective and comparable, which makes them comforting. They’re easy to plug into a spreadsheet and easy to explain to a partner, lender, or internal team.
The problem is that these metrics only describe the surface of a deal.
Why Paper Metrics Break Down in Practice
Paper assumes certainty.
Real commercial real estate deals rarely operate that way.
Spreadsheets typically ignore:
- Vacancy risk
- Timing of cash flow
- Concessions and incentives
- Flexibility within the lease
- Downside protection if conditions change
Two deals can look identical on paper while carrying very different risk profiles and long-term outcomes. The spreadsheet treats them as equal. Reality doesn’t.
This is why deals that “look great” upfront often disappoint, and why quieter deals outperform over time.
What Actually Makes a Commercial Real Estate Deal “Good”
A good deal isn’t defined by how clean it looks. It’s defined by how well it performs under real-world conditions.
That usually comes down to factors that don’t show up clearly on paper:
- Flexibility: Ability to adjust, expand, exit, or renegotiate
- Risk alignment: Who absorbs downside if conditions change
- Timing: When cash flow actually starts and stabilizes
- Optionality: Choices created by the structure of the deal, not just the price
These elements matter more than perfect headline numbers, but they’re harder to quantify, so they’re often ignored.
Why the Best Deals Often Look Messy
Strong deals frequently involve:
- Concessions that distort headline pricing
- Uneven value spread across lease years
- Tradeoffs between rent, term, and certainty
- Structures that favor one side quietly over time
To someone scanning listings or comparing price per square foot, these deals can look unattractive or complicated. To someone focused on outcomes, they’re often the most resilient.
Clean doesn’t mean good.
Messy doesn’t mean risky.
The Real Takeaway
If a commercial real estate deal looks “great” the moment you put it into a spreadsheet, it’s probably only telling part of the story.
Good deals aren’t optimized for appearances, they’re structured for reality.
