Commercial real estate comes in several types & forms.
There are a handful of different property types, and knowing the difference between each type makes it easier to invest smart. Let’s take a look.
Offices
Office buildings can come in many different forms – a one-story building is just as much an office as a 20-floor tower in the heart of the city.
Office properties are usually grouped up based on their height, location and overall usage.
The kind of tenants which office buildings get depends on their stature in a lot of cases. Law firms, for example, like to have high-rise buildings that show off a view to impress clients. However, new generations often want an office space that is suitable for immediate access and doesn’t like sharing space with “stuffier”, more “uptight” businesses.
Industrial
An industrial building is often used for things like R&D, storage and manufacturing.
These types of buildings need a lot of open space, the ability to have trucks in and out, and low-density parking options. With this in mind, an industrial building tends to attract a lot of the same kinds of businesses – storage companies or factories.
Retail Properties
Retail buildings, as a general building type, can vary massively depending on the size, being a small shop or a massive shopping complex.
A retail site can rely heavily on traffic and parking availability. Those sites located in urban areas often have a heavy emphasis on foot traffic.
A retail tenancy can be varied, and some people will refuse to inhabit the same space as other kinds of businesses. You need to try and balance businesses near each other as some don’t get on.
Family Buildings
Family buildings can come in all shapes and sizes, just like other buildings, and can be a block of flats or resort areas.
These kinds of properties used to be considered residential assets, but recently they’ve become popular for commercial real estate assets.
These kinds of complexes have become heavily commercialized and can be run effectively by an investor.
A lot of them outsource to handle the bulk of responsibilities.
Hotels
Hotels are a form of commercial real estate which are defined by the type of service they offer. A proper long-stay hotel is different to a short-term hotel, for example.
However, hotels can be an effective tool and see a lot of frequent usages.
This makes them a good choice for anyone who wants a fairly passive venture.
Care/Elderly Support Homes
While a lot of care homes are public services, which means they’re owned and run by the government, there are some privately owned places that still see the same use.
These types of properties effectively use the care service as a tenant and allow them to use the building at a cost. It is, however, an acceptable way of doing things.
Self-Storage Buildings
Self-Storage buildings are popular because they require minimal participation. All you’ll often need to do is keep the lights on and have adequate space for people to store things – after that, you can collect the rent and do minimal work.
Final Thoughts
There are different types of commercial real estate options to explore, and sorting between them can be important for getting the best results.
Buying up the right type of commercial property for your needs will depend on what type of property you’re after. Some investors prefer hotels and storage units because they require little participation, which is good.
However, it is up to you to pick and choose what will work best for you, and this can often be a process that takes a little time. It is, however, worth it.
