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What are the five types of commercial property?

On Behalf of | Jul 30, 2021 | Real Estate |

The broadest classification of real estate properties are “residential” and “commercial.” Generally speaking, people purchase residential property to live in themselves. It is the most simple property classification and involves condominiums, townhouses, and single-family homes. Commercial property, however, is a lot more nuanced than there are multiple different kinds.

Overall, there are five different categories of commercial properties that you might choose to invest your money in. According to Fortune Builders, these include commercial office spaces, industrial, hospitality, multifamily properties and retail.

Commercial Office Spaces

Commercial office spaces are the category with the most variation within it. Commercial office spaces are generally areas where B2B operations set themselves up. They are further broken down into three classes of commercial office space: A, B, and C.

Class A office spaces are higher-end and usually the most expensive. Class B office spaces are less competitive than Class A, and most of the time owners renovate them after purchasing. A Class C office space is typically over 20 years old and requires a lot of maintenance before the owner can rent it out.

Industrial, hospitality, multifamily, and retail

Industrial commercial real estate refers to properties like warehouses, plants and factories. Retail commercial spaces are for B2C companies to sell their products directly to customers. Hospitality refers to motels, hotels and sometimes short-term rentals. A multi-family commercial real estate building involves properties like apartment buildings and duplexes.

Understanding the different kinds of commercial real estate space can help you zero in on the variety of commercial space that is right for your investment wants and needs.