Website design By BotEap.comDo you want to invest in commercial real estate, but don’t know what type of property to consider? Here’s a comprehensive guide to the five most common types of commercial properties.

Website design By BotEap.com1) Multi-family (apartment buildings) – Multi-family refers to apartment buildings of all sizes. It is classified into garden apartments, apartments without a lift, mid-rise apartments, high-rise apartments, and special purpose housing.

Website design By BotEap.comGarden apartments are low-rise apartments with less than 3 stories, built in a garden-like setting. The apartments without elevator are apartments with 4 to 6 floors without elevator. The mid-rise apartments are 4-8 floor apartments with a lift. The skyscrapers are more than 9 floors with at least one elevator. Special purpose housing is a multi-family property that targets a segment of the population, including student housing, senior housing, subsidized housing, etc.

Website design By BotEap.comAdvantages of multi-family properties:

Website design By BotEap.com• Easy access with smaller properties and slow transition to larger properties

Website design By BotEap.com• Fiscal benefits

Website design By BotEap.com• Use current rents to finance

Website design By BotEap.comCons of multi-family properties:

Website design By BotEap.com• Tenant management 24 hours a day, 7 days a week

Website design By BotEap.com• Legislation in favor of tenants

Website design By BotEap.com• Rent control

Website design By BotEap.com2) Industrial – Industrial is normally used to produce, manufacture or store products. Includes warehouses, garages, distribution centers, etc. It is often divided into heavy manufacturing, light assembly, flexible warehouse, and bulk warehouse, depending on the size and use of the property.

Website design By BotEap.comHeavy manufacturing often uses machinery heavily and typically requires a substantial amount of renovation before it is rented to another tenant. Light assembly includes storage, product assembly, and office space, which is easier to reconfigure than heavy fabrication. Flexible warehouse typically includes office and industrial space, making it easily convertible space. Bulk warehouses are massive properties, typically 50,000-1,000,000 square feet of space, generally used for regional product distribution.

Website design By BotEap.comAdvantages of industrial properties:

Website design By BotEap.com• Single tenant deal

Website design By BotEap.com• Long-term and stable leases

Website design By BotEap.com• Relatively small initial investments

Website design By BotEap.comCons of industrial properties:

Website design By BotEap.com• Specialization of the area, which makes it difficult to find new occupants.

Website design By BotEap.com• Large and extensive reconfiguration expenses

Website design By BotEap.com• Higher tax rates, depending on the area

Website design By BotEap.com3) Office buildings – This category includes single-tenant properties, small professional office buildings, downtown skyscrapers, and everything in between.

Website design By BotEap.comOffice buildings are the Central Business District (CBD), which is located in the middle of a city, or suburban office buildings. There are three categories: Class A, Class B, or Class C, which is determined by the quality of the construction and the convenience of the office location.

Website design By BotEap.comAdvantages of office buildings:

Website design By BotEap.com• Less turnover

Website design By BotEap.com• Longer lease terms

Website design By BotEap.comCons of office buildings:

Website design By BotEap.com• Less frequency to raise rents

Website design By BotEap.com• Emphasis on parking

Website design By BotEap.com• Expensive financing options

Website design By BotEap.com4) Retail / Restaurant – Retail includes shopping centers, community shopping centers, energy centers, regional shopping centers, and outdoor parcels.

Website design By BotEap.comStrip centers are small retail properties that may have an anchor tenant, which is a larger, more well-known tenant that will attract small retail tenants. Community retail centers are between 150,000 and 350,000 square feet with multiple anchors, usually supermarkets and drug stores. The energy centers have several smaller retail stores with some retail stores like Wal-Mart, Lowes, Staples, Best Buy, etc. occupying between 30,000-200,000 square feet, containing various parcels. Regional shopping centers are between 400,000 and 2,000,000 square feet with many anchor tenants. Our parcel is land reserved for individual tenants, such as fast food restaurants or banks.

Website design By BotEap.comAdvantages of retail / restaurant properties:

Website design By BotEap.com• Security and profitability of an Absolute Triple Net (NNN) lease

Website design By BotEap.com• Less turnover

Website design By BotEap.com• Less tenant management

Website design By BotEap.comCons of retail / restaurant properties:

Website design By BotEap.com• Less frequency to raise rents

Website design By BotEap.com• Depends on the tenant’s performance

Website design By BotEap.com• Location and foot traffic are extremely important

Website design By BotEap.com• Emphasis on parking

Website design By BotEap.com• Visual maintenance

Website design By BotEap.com5) Earth – The land is self explanatory. It is often classified as new land, fill land, and abandoned land.

Website design By BotEap.comGreenfield land is underdeveloped land, such as farms and pastures. Infill lands are vacant lots located in cities that have already been developed. Abandoned land is typically environmentally damaged land that was previously used for other industrial or commercial uses. The land is available for reuse.

Website design By BotEap.comAdvantages of the land:

Website design By BotEap.com• Fiscal benefits

Website design By BotEap.com• Less expensive

Website design By BotEap.com• More rental possibilities (depends on the location)

Website design By BotEap.comCons of the land:

Website design By BotEap.com• No immediate income from tenants

Website design By BotEap.com• Few financing options

Website design By BotEap.com• Requires development from scratch

Website design By BotEap.comThe above are the most common types of commercial properties. There are several others that have not been discussed above such as hotels, funeral homes, nursing homes, theaters, etc., which are special purpose type properties.