Understanding the Types of Commercial Real Estate Properties

Published On: May 9, 20210 Comments on Understanding the Types of Commercial Real Estate PropertiesTags: , Last Updated: February 7, 20243.4 min read

Commercial real estate properties are meant to generate money. These properties can be used in the production and sale of goods and services. The owner of the commercial real estate property can make money in two ways. One of how the owner gets money is by renting out the property to a tenant. The second way is by the capital gains that they can get when they sell the property after it has appreciated. But if you buy the wrong type of commercial property you’ll end up in debts and that’s why we composed this guide to the types of commercial real estate properties.

Understanding the Types of Commercial Real Estate Properties

Some property owners may also run businesses in their properties but most of them prefer to rent the property to tenants and earn from rent. The tenants also get income when they operate businesses in these properties. Therefore, the property is beneficial to both the owner and the tenant. There are different types of commercial real estate properties, and they are discussed in detail in this article.

1. Industrial Properties

Industrial commercial real estate properties are located in suburban industrial parks where there is good infrastructure and water systems. There are different types of such properties. Flex industrial properties have both offices and industries while bulk warehouses are a type that is used as distribution centers. Light assembly industrial parks are used for assembling while heavy manufacturing is used for the production of goods and services.

2. Retail Properties

Retail commercial real estate properties are used as shops, restaurants, and other customer service businesses like pharmacies. Four types of such properties are neighborhood community properties, power centers, malls, and strip centers. When it comes to investing in retail properties, Si Vales Valeo Real Estate shares that location is key. You want to make sure that the property is in an area where retailers would be interested in signing a lease and where shoppers would go to.

3. Offices

The office is one type of commercial real estate property. Depending on where they are located, offices can be urban or suburban, and they can also be single-tenant or multi-tenant. There are different classes of offices that are category A, B, and C. Class A office buildings have excellent finishes and amenities, and they mostly have white-collar and professional service tenants.

Class B office buildings also have good finishes and amenities but not as good as those in class A, and they are rented by different types of tenants. Class C buildings on the other hand have rent that is below the market value. If you are looking for an office in D.C, you can learn more about commercial real estate in D.C from The Genau Group. This will help you to make an informed decision when choosing a place to lease.

4. Multifamily Units

These properties are used for residential purposes excluding property that is for single-family purposes. Different types of multifamily properties are high and mid-rise buildings, walk-ups, and garden-style properties.

commercial property

5. Hotels

These buildings are used for accommodation and other services like conferences. The different types of hotel properties include resorts, casinos, extended-stay, boutique, full and limited-service hotels. Some hotel buildings also have office spaces.

6. Mixed-Use Buildings

These commercial real estate properties are used for more than one commercial use. For example, a building that has offices and residential units and it’s build in the perfect site location for commercial real estate.

7. Special Purposes Properties

Special purpose units are built for a specific purpose like schools, theaters, golf courses, self-storage units, and parking structures.

In summary, commercial real estate properties are used to generate money for the owners when they rent out the property to tenants or when they sell the property after it appreciates. The tenants also earn money when they run businesses in these properties. The different types of commercial real estate properties include offices, hotels, retail units, industries, special purpose properties, and mixed-use properties.

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