Understanding Commercial Real Estate

 

Commercial real estate refers to any property that is used for business purposes instead of housing. This can include offices, retail spaces, warehouses, and even parking garages. Business tenants usually rent out the space and pay a monthly fee to use the property. Commercial real estate can be much more expensive than residential properties, and it’s typically held by a larger investor than individual homeowners or landlords.

Commercial property investors typically look for rental properties that can generate a steady income over time. Apartment buildings are a type of commercial real estate that fits this criteria, and they can be urban or suburban as well as mid-rise or high-rise. Apartment buildings are considered safe investments because they have multiple units that are occupied by people who move in and out regularly. Also read https://www.acashhomebuyer.com/sell-my-house-fast-richardson-tx/

Office buildings are another common type of commercial real estate, and they can be classified as general office space, medical or research and development space. General office spaces are typically located in metro or city areas and have multiple floors. They can also be found in large office complexes, which often have food options and a fitness center on site. Medical or research and development spaces are more specialized and may have high ceilings or lab space. This type of space can be hard to find and may be more costly than general office space.

Other types of commercial real estate include manufacturing facilities, distribution hubs and logistical centers, which are located outside of urban or residential areas. These are a great way to diversify your portfolio with a type of property that’s less volatile than other types of commercial properties.

There are a variety of ways to invest in commercial real estate, but direct investment is the most popular. This involves working with a broker to find a property that meets your financial goals and then purchasing the property outright. You can also purchase shares of a REIT (Real Estate Investment Trust) to diversify your investment strategy. REITs are companies that own and operate commercial real estate and typically specialize in particular types of property. For example, National Retail Properties is a REIT that focuses on single tenant, triple net leased retail space while Prologis is a REIT that specializes in industrial and logistics properties.

Those interested in a career in commercial real estate should familiarize themselves with the different categories of commercial property and learn about the processes involved in buying, selling or leasing these properties. This includes learning how to determine the value of a property, how it’s financed and what legal documents are required for a sale or lease. NerdWallet writers are subject matter experts and use primary sources for their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. Our journalists’ work is fact-checked for accuracy, timeliness and relevance. For more information, see our Editorial Policy. NerdWallet’s team of experts is committed to rigorously researching and writing content that helps you make better decisions.

 

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