Understanding the 6 Common Types of Commercial Real Estate
Everything you need to know.
3 min read
At first thought, the commercial real estate industry can seem daunting. There is no doubt that commercial real estate tends to come off as more complex for those who have dabbled in both the residential and commercial fields. Although this preconception may be accurate for its reasons, understanding the various aspects of the industry can help those looking to enter it make conscious decisions into where they would like to direct their business.
Commercial real estate can generally be broken down into six standard categories. Keep reading to find out what they are and how they differ!
Multifamily
Multifamily properties can be looked at as both residential and commercial property. However, it is generally used for investment purposes. Investors who are explicitly looking for a multifamily property would like to generate income by renting multiple units to tenants. These types of properties can be anything from a duplex, triplex to a multi-unit apartment building.
Office
Similar to multifamily properties, office buildings are typically leased out to multiple tenants and organizations. Office buildings are categorized into class A, class B, and class C, with class A being the most desirable and class C being the least.
Industrial
Industrial properties are used for a variety of purposes; however, they are typically suitable for manufacturing purposes. However, they can also be used as a warehouse and storage for organizations or brands.
Retail
Retail spaces vary in size and location and heavily rely on the investor's business needs. These types of properties can be anything from a shopping centre to a storefront. Retail spaces usually generate reoccurring leases for set periods.
Mixed-Use
Mixed-use properties are a combination of various real estate property types. It is commonly comprised of commercial space at the base level of the building, with living space above. This type of property is of high interest because of its live-work revenue potential.
Land
Parcels of land fall into the commercial real estate industry because of their multifunctionality. It has endless potential for investors seeking to build from the ground up. If zoning permits, there are various property types that one can build on the land, making it entirely customizable.
In commercial real estate, there is a specialty for everyone. But what makes it different? You can dabble within multiple areas of the industry, allowing you to grow your expertise and your business.
Reference
The 8 Types of Commercial Real Estate [Web log post]. (2019, September 24). Retrieved May 17, 2021, from https://www.reonomy.com/blog/post/types-of-commercial-real-estate
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