Microgrid systems located within commercial premises are becoming increasingly popular and their dynamic behavior is still uncharted territory in modern power networks. Improved understanding in design and operation is required for the electricity utility and building services design sectors. This paper evaluates the design requirements for a commercial building microgrid system to facilitate seamless mode transition considering an actual commercial building microgrid system. A dynamic simulation model of the proposed microgrid system is established (utilizing DIgSILENT Power Factory) to aid the development of planning and operational philosophy for the practical system. An economic operational criterion is developed for the microgrid to incorporate selective mode transition in different time intervals and demand scenarios. In addition, a multi-droop control strategy has been developed to mitigate voltage and frequency variations during mode transition. Different system conditions considering variability in load and generation are analyzed to examine the responses of associated microgrid network parameters (i.e., voltage and frequency) with the proposed mode transition strategy during planned and unplanned islanding conditions. It has been demonstrated that despite having a rigorous mode transition strategy, control of certain loads such as direct online (DOL) and variable-speed-drive (VSD) driven motor loads is vital for ensuring seamless mode-transition, in particular for unplanned islanding conditions.