Different Types of Commercial Real Estate
Commercial real estate (CRE) can loosely be defined as properties that have the potential to generate income. Learn about the six different types of commercial real estate.
Office
As the name suggests, commercial office properties are leased or sold to businesses to be used as office space. The office category can be separated in two sub-categories, urban and suburban. Urban office buildings are often high-rise structures or skyscrapers while suburban offices are usually smaller buildings, commercial condos, or business parks.
Retail
Retail buildings are typically the most visible type of commercial real estate and are used for stores, shops, restaurants, centers/malls, and other uses which require frequent foot traffic. Retail properties can be single tenant free standing structures (also referred to as pads) or adjoined into a plaza, center, or mall arrangement.
Industrial
Industrial property is mainly used for manufacturing, heavy production, warehousing, storage, distribution, and R&D. Industrial properties are usually located outside of major urban areas as the building footprint can require a sizable portion of land. Industrial buildings may have a small office component but a large portion of the structure will typically be open space.
Multifamily
Multifamily properties encompass all types of real estate designed for living that are greater than four units. Any property with under four units is considered to be residential real estate. Multifamily properties could include apartment complexes, condo buildings, and downtown high-rises. The size of multifamily can range greatly, starting at four units and going all the way up to major skyscrapers.
Land
The land category refers to any raw or undeveloped parcels of land. Land can be sold or even used with a ground lease. Infill land is located within a city and is usually well purposed for development while agricultural land is usually in rural areas and likely used for farms, ranches, and orchards.
Special Purpose
Special purpose essentially encompasses all commercial real estate that does not fit into the other five categories. Special purpose commercial real estate can include hotels, hospitality, churches, hospitals, medical, self-storage and more.
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