So let’s get into it and break down the various kinds of commercial real estate buildings.
Retail – Strip Malls, Store Fronts, Big Box Buildings
Retail commercial properties are investments with the primary purpose of supplying space for stores and businesses to sell their goods or services. Anything from a mall to a stand alone gas station would be considered a retail commercial building.
Industrial – Warehouses, Manufacturing, Storage
These properties are designated for manufacturing businesses or other similar set ups. In most areas industrial property is strictly zoned as to limit noise, traffic and other elements that don’t mingle well with residential uses. Industrial property can be multi-tenant or stand-alone.
Office Centers, Medical Office and Sky Scrapers
When most people think about commercial real estate they think of office buildings or even high rises. Offices provide non-industrial workspace for companies and businesses. They can be as large as a corporation’s headquarters campus or a small office building offering suites to small businesses and professionals.
Multifamily Residential Properties
Just because this category of buildings houses living space for people doesn’t mean its not commercial real estate. Apartment buildings and other multifamily dwellings are valued the same way as other commercial real estate properties and can be a valuable addition to your real estate portfolio.
Mixed Use Buildings
There always has to be an exception to the rule, and in many markets the mixed use commercial building is becoming more popular. These properties mix housing, commercial and retail spaces all in one and can be very popular.
The Other Types Of Commercial Investment Properties
There is a large amount of properties that don’t fit nicely into any category. Retirement housing, hotels, motels, storage businesses and many others still are valued as commercial real estate.
The biggest difference in commercial propertiesis how they are valued as opposed to single-family residential properties. The latter are valued based on comparable sales while the former are valued on the income they produce. This allows the commercial investor to increase their property’s value by making improvements that increase the income.
As with any investment, prospective investors need to look at the ROI of the property in question, the monthly cash flows and the market as a whole. As you can see from the above list the options in commercial investing are bountiful.
Emily Cressey is a Commercial Real Estate Investor based out of Seattle, WA. She and her partners have invested in over $30 Million in commercial real estate projects. If you are new to investing, or would like help getting started, visit their commercial real estate investing site and subscribe to receive your free 5-video Course On Commercial Real Estate Investing