Commercial Real Estate Investing: Understanding the Different Types of Commercial Real Estate

By
Services for Real Estate Pros with Representative

Are you thinking about investing in commercial real estate? Understanding the different types of these properties is essential. Keep reading below to find out more!

Generally, real estate is a safe investment. No matter where in the world, the real estate market always finds a way to thrive again after dealing with some hard times. But being a good real estate investor takes a lot of patience, great investing skills, and, most importantly, expertise and knowledge. 

You can’t possibly make informed and advantageous real estate investment decisions without knowing all the insights of the market. And, one of the most important things to know is the types of properties you can invest in, be it to flip them or rent them. 

If you’re interested in investing in commercial real estate, find out that there are several different types that you can invest in. These types can include anything from retailers of all kinds like office spaces or hotels, malls, healthcare facilities, and more. 

Keep reading below to find out more about commercial real estate and the different types of commercial properties you can invest in! 

Commercial real estate: An Overview

Before we talk about the different types of commercial real estate properties, let’s make sure we are on the same page with what commercial real estate is. 

Commercial real estate includes properties that are exclusively used for business purposes or to provide workspaces. In other words, they are the opposite of living spaces.

Commercial properties are rented or bought by people who conduct activities that generate income and profit. These are businesses of all types, from stores to restaurants, casinos, or healthcare facilities. 

Benefits of investing in commercial properties as opposed to residential real estate

There are several benefits of investing in commercial real estate when compared to investing in residential properties, including: 

  • More substantial income as businesses pay more to rent a property.
  • More secure tenants as businesses typically rent a property for longer periods of time.
  • Tenants who have more respect for rented property as it is their office space and the place where customers visit them.
  • Commercial real estate looks good in an investor portfolio. 

The most popular types of commercial properties

Now, there are four main types of commercial real estate. These types include properties like office spaces, industrial, multifamily rentals, and retail. Keep reading below to find out more! 

Multifamily properties

This type is kind of a combination of commercial and residential real estate. It basically includes all types of residential properties, outside of single-family, such as apartments, condos, and townhomes. They can serve as residency, but their main purpose is for investment. 

Multifamily commercial real estate can be split into multiple property types, including high-rise, mid-rise, garden-style, walk up, manufactured housing community, and special purpose housing such as student or senior housing.

Office properties

As the name suggests, office properties are those building used by businesses to create a workspace. These properties are also split into two categories: urban and suburban. 

These buildings can have more tenants, meaning that more businesses share the space, or single tenants, meaning that a single business rents the entire property. 

Retail properties

This type of commercial real estate is the broadest as it includes all types of businesses that rent properties for their income-generating activities, from malls to stores, casinos, and healthcare facilities. 

While most of these types of commercial retail properties are well-known, probably the most striking to you are the casino properties. But, yes, casino real estate is a big thing in commercial real estate. Despite the fact that online casinos are increasingly more popular as more and more gamblers play games like tragamonedas online, land-based casinos also remain popular. 

More and more investors open land-based casinos as players are becoming increasingly aware of how fun casino games are. During these uncertain times, most players from around the world play their favorite casino games on their smartphone

And that makes perfect sense as they are safe, fun, and allow them to play from the comfort of their own home. This is how the games from Colbert casino online are as well. However, when the world goes back to normal, land-based casinos will likely be in high demand too. 

Industrial properties

Industrial real estate is another popular type of commercial real estate. It includes properties that are part of four different categories, including heavy manufacturing, light assembly, bulk warehouse, and flex industrial. Properties used for purposes like research and development are also part of the industrial real estate type. 

Industrial properties are more often than not located in urban areas and can be rented by a wide variety of tenants. 

Hospitality properties

As the name suggests, hospitality properties include all establishments that provide accommodation, meals, and other services for travelers or tourists. However, these hospitality properties also split into six different categories, such as limited-service, full-service, boutique, casinos in touristic areas, extended-stay properties, and resorts. 

Special purpose properties

Commercial real estate investors like you own these types of properties, but they don’t fall into any of the other types we’ve discussed above. Such special-purpose properties can be churches, amusement parks, and anything that has different characteristics than the ones mentioned already. 

Which type should you choose?

If you are a novice commercial real estate investor and you’re wondering which commercial real estate type you should choose, find that there is no easy answer to this question. 

In fact, the best choice is a very personal matter as you are the only one that knows your real estate investment goals and what type of activities you want to take place in your property. 

Explore more about each type of commercial real estate property to understand better exactly what type of activities and tenants it involves. This way, you’ll be able to make an informed decision. 

Comments (1)

Bill Salvatore - YVP Blog
Arizona Elite Properties - Chandler, AZ
Realtor - Valley of the Sun / golfArizona@cox.net

Cynthia,

Make it a great Wednesday and thanks for sharing.  Bill Salvatore

Apr 14, 2021 06:19 AM

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