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5 Types of Commercial Real Estate

Any property with the ability to gain profit through rental income or capital gain is known as commercial real estate. This industry is precise in defining each type of property individually. The following are the different types of commercial real estate:

  • Multi-family

It covers all residential real estates from apartments, townhomes, condos, among others. The following are the three categories of multi family properties:

  1. Garden Apartments – buildings that are 3-4 stories having between 100 and 400 units and no elevators and surface parking

  2. Midrise Apartments – 5-9 stories with at least one elevator and 30-110 units

  3. Highrise Apartments – managed in a professional way with more than 100 units

  • Office

Office buildings are similar to multifamily properties in that they are branched down into three classes based on their size, quality, and health of the environment.

  1. Class A – best buildings in terms of location and construction

  2. Class B – buildings with less attractive location but excellent construction

  3. Class C – those unfavored buildings in non-desirable locations

  • Industrial

These properties also vary based on the size and specific uses. The following are the different categories:

  1. Heavy Manufacturing - most large manufacturers who use heavy machinery fall in this category. These properties always require massive renovation for the next tenant.

  2. Light Assembly - they mainly include office spaces, storage buildings, and product assembly. They are simpler to re-purpose

  3. Flex Warehouse - an industrial property that includes office space and industrial. It is easy to convert and renovate

  4. Bulk Warehouse – large properties mainly for distribution of products. The main requirement is easy to access for trucks used for transporting goods.

  • Retail

These are the buildings and properties that hold businesses we frequently visit, such as retail stores. Some are for single-use, managed by one firm, and others are leased out to several tenants. Retail properties are subdivided into:

  1. Strip Center – small properties with no anchor tenants.

  2. Community Retail Center – range from 150,000 to 350,000 square feet and hosts multiple anchors.

  3. Power Center – consists of a few retail stores with a few distinguishable major box retailers.

  4. Regional Mall – buildings with several tenants, such as big-box retailers.

  • Hotel

They are subdivided into three categories based on size and services delivered.

  1. Full-Service Hotels – these are big names hotels mainly found in tourist areas or central business districts

  2. Limited Service Hotels – small hotels that do not deliver room service or convention space

  3. Extended Stay Hotels – they include large rooms, a kitchen and are meant for people spending anything more than a week

These are a few types of commercial real estate. Others include theme parks, funeral homes, theatres, churches, and many others that the Donna Andruk Team - Keller Williams Realty can handle. We provide advice on strategic decisions in the real estate market.

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