Decoding Types of Commercial Real Estate Assets Part 1

While commercial real estate investing can be lucrative, there is much you need to know before starting. One important point is that there are many different types of commercial real estate assets. They might all present opportunities, but there are differences. Investors can make informed decisions by understanding the nuances of other asset types. This post will explore the various categories within commercial real estate.

4 Types of Commercial Real Estate

Retail Real Estate

Retail is one of the most common types of commercial real estate. It includes everything from a small shop on your local main street to sprawling shopping complexes. Grocery stores, florists, and dry cleaners are examples of retail locations. Retail can also include subsectors like gas stations and restaurants. Retail properties are for selling or marketing goods and services and are typically open to the public.

Multifamily Real Estate

Multifamily real estate of made up of commercial properties for residential purposes. As the name suggests, these properties have multiple dwellings to accommodate two or more families. On a smaller scale, it could be a standalone duplex or triplex. However, in commercial real estate, the properties are typically large apartment buildings or complexes. You can also classify condominiums as multifamily real estate. In most cases, rent is the primary revenue source for multifamily properties. However, in the case of condominiums, you might develop the property and then create revenue by selling the units.

Office Real Estate

Office real estate consists of properties businesses may use for administrative functions or to offer professional services. Smaller office properties might be single-story buildings with a few office units for rent. However, you also have larger properties like office high-rise buildings and office parks with several buildings. A significant point for office properties is that investors and others often classify them by quality. The classes are A, B, and C, with class A covering the best and most valuable office properties. A property’s class typically depends on factors like location, condition, age, and amenities.

Industrial Real Estate

Industrial real estate encompasses a broad array of properties a business may use for industrial purposes. Warehouses are one of the more common types of industrial properties. Manufacturing facilities are also common types of industrial real estate. Like office properties, industrial real estate may also have quality and value classifications. Another noteworthy point is that industrial real estate is usually closed to the public. They typically only allow people who work at the facility to enter.

This post covered four of the more common types of commercial real estate assets. However, there are more types to discuss. Make sure to return for part two to learn about four more types of commercial real estate.