Building generational wealth through commercial real estate is rooted in ownership of income-producing assets that appreciate over time while generating consistent cash flow. Unlike many short-term investments, commercial properties can provide stable, long-term revenue through leases that often include rent escalations. This predictable income supports current financial needs and can also be reinvested to acquire additional assets and compound wealth across decades.

A 1031 exchange is one of the most valuable tools available to commercial real estate investors. By allowing investors to defer capital gains taxes when selling an investment property and reinvesting into another qualifying property, a 1031 exchange helps keep more capital working in real estate rather than being paid immediately to the IRS.

As Thanksgiving arrives, I am reminded of the remarkable spirit that defines Alabama – a spirit rooted in faith, family, hard work, and genuine care for one another. Across our towns and cities, Alabamians in our neighborhoods and workplaces show every day what it means to serve with generosity and care with sincerity.

Owner-occupied commercial real estate loans differ from investment property loans primarily in how the space is used and how lenders assess risk. When a business occupies more than 50% of the building, it typically qualifies as “owner-occupied,” which allows access to more favorable loan terms, including lower interest rates, higher loan-to-value ratios, and potentially SBA financing options. Because the property’s performance is tied to the operating business rather than external tenants, lenders often view owner-occupied properties as less risky. In contrast, investment commercial loans (the owner occupies less than 50%) depend on tenant income and lease stability, which generally results in stricter underwriting and higher equity requirements.

A modified gross lease is a commercial lease in which the tenant (Lessee) pays base rent plus a share of certain operating expenses, such as utilities or maintenance. It blends features of a gross lease—a lease in which the landlord (Lessor) covers expenses with a tenant's all-inclusive, flat rate rental payment—and a net lease, a type of lease in which the tenant (Lessee) pays them all. A modified gross structure offers flexibility and allows costs to be shared between landlord (Lessor) and tenant (Lessee).

Understanding a Triple Net Lease (NNN): What Every Property Owner and Tenant Should Know

Nicole Jones Wadsworth, PhD, MBA, MS

Dr. Nicole Jones Wadsworth is a trailblazing economic developer and conservative business leader who has dedicated over two decades to strengthening Alabama’s communities. With four academic degrees and two certifications focused on contracts, economic development, and policy, she brings unmatched expertise to commercial real estate and economic

In commercial real estate, a 1031 Exchange—named after Section 1031 of the Internal Revenue Code—allows investors to defer paying capital gains taxes when they sell a property, as long as they reinvest the proceeds into a similar, or “like-kind,” property. This tool is especially valuable for investors seeking to grow their portfolio or reallocate assets without triggering an immediate tax liability. The like-kind requirement is broad, meaning an office building, warehouse, retail space, or even undeveloped land can typically be exchanged for another type of commercial property, as long as both are held for investment or productive use in a trade or business.