When you hear the term commercial real estate, what do you think of? Do you think of tall skyscrapers, big office buildings, warehouses and so on? If so, then you already know what commercial real estate is. However, there are so many different types of commercial real estate that it can be easy to miss some of the different types that exist. But don't worry - we're going to cover the six primary types of commercial real estate.
Recall the definition of a commercial property.
Let’s first recall what defines real estate as a commercial property. In essence, commercial properties refer to real estate that is being used for the pursuit of profits. In other words, they are occupied by profit-generating companies. The different types of commercial real estate are commonly split into six different categories. These include:
Retail – Just as it sounds, the category of retail commercial real estate accounts for properties used in retail settings. This includes everything from various types of stores and storefronts to malls and more. In fact, restaurants are also included under this category. For retail properties with multiple tenants, it’s noticed that there is usually a lead company that drives primary traffic to the plaza.
Office – As you may have guessed, commercial properties in this category are leased to companies to use as office space. There are two primary types of office buildings – urban and suburban. Urban office buildings are the tall skyscrapers that form a city’s horizon. It also includes other large office buildings that reside in busy cities. Suburban office buildings on the other hand are typically smaller and reside outside of major cities.
Multifamily – Multifamily properties include apartments, condominium buildings, townhouse developments and other co-operative living spaces. These can range in size anywhere from a couple of levels with no elevators to skyscrapers with over twenty floors. As you may notice, it does include single-family homes since it is classified as residential real estate.
Industrial – The industrial category includes properties used for four main purposes. This includes heavy production, warehouse storage, assembly lines and industrial office space. Research and development (R&D) labs are also classified as a specialized type of industrial property. All of these are typically located outside of busy urban centers.
Hotel – This accounts for the buildings dedicated to hospitality and accommodations for travelers and tourists. There are many different types of hotels that fall under this category. Whether it’s a hotel chain or a boutique accommodation, a casino or even a resort – all of it falls under this category.
Special Purpose – This is essentially the catch all category and can still be owned by real estate investors. These are properties designed with a very specific use in mind. Some examples include amusement parks, churches, self-storage and more.
On a final note.
Of course, there may be some other types of commercial real estate that you can think of. So long as it’s occupied by tenants conducting profit-generating activities then it likely qualifies. And we can’t forget that with each type of commercial property comes its own unique set of considerations for the potential investor. Generally, it’s recommended that you specialize in a particular category and learn it inside out. This way, you can specialize and really know your way around the niche.
All in all, today's market is filled with many opportunities for the savvy investor. Our Elite Legacy Education trainers will introduce you to proven strategies that can help you launch your career as a successful real estate investor.
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