What Is Commercial Real Estate?

To know how to buy and sell real estate, first, you must know what commercial real estate is. Some investors may look at a Commercial as similar to a single-family home. Even real estate agents inexperiaced in commercial properties may price your properties the same they would price a single-family home. This could lead to overpaying for a property that will not generate the returns needed for a profitable investment—knowing what to look for starts with understanding what you are buying. There are four main categories of commercial real estate and a quick overview of each.

Multifamily

Any residential structure can house five or more tenants in a single building or on a parcel of land. Mobile home communities and RV parks are subcategories of this type of commercial real estate. This type of real estate can be very hands-on for owner-managers or passive with a quality property manager.

Retail

Retail is a very diverse product type, ranging from single-tenant shops to malls and shopping center. This type of asset can go from owner-operated retail to triple net (NNN), which means the tenant is responsible for taxes, insurance, and maintenance.

Office

Offices are real estate where the occupants typically handle administrative services. This type of asset can have a single tenant, like a doctor’s office, all the way to a skyscraper with hundreds of tenants. This type of asset can range from owner-operated to triple net (NNN), which means the tenant is responsible for taxes, insurance, and maintenance.

Industrial

It is a type of real estate that covers a variety of subclasses like warehouses, distribution, manufacturing, research and development, and data storage. This type of asset can range from owner-operated to triple net (NNN), which means the tenant is responsible for taxes, insurance, and maintenance.