The term commercial real estate is used often. But what does
that actually mean? Clearly, it does not include houses. So what is it?
Commercial real estate falls into three categories:
o
Office properties can be anywhere from a 900
square foot office condominium to a high-rise office building in the central
business district. While access for visitors is important, the prime focus of
office properties is to provide a good working environment for company
employees.
o
Retail properties, as the name suggests, are
designed to house retail businesses. High traffic count and visibility along
with easy customer access are crucial aspects in retail real estate. Again
there is a wide range of sizes starting with a small stand-alone building and
going all the way to a regional mall.
o
Industrial properties are used in the
manufacturing and distribution of products. Since visibility is not important,
these properties are typically located off the major corridors. Truck access is
important in these properties to move raw materials in and finished product out
to customers.
These descriptions apply most of the time, but properties
don’t always fall neatly into one property. For instance, an office user might
lease space in a retail building. Some would also include multifamily housing,
that is apartments, in the category of commercial real estate due to the large
dollars involved in such an investment.
Investors in commercial real estate tend to focus their
efforts in one of the three categories above. Doing so allows them to build
their knowledge of that particular sector and use the services of various
vendors over their multiple properties.
Getting started in commercial real estate investing is a simple, straightforward process. Potential investors should seek help and advice from an established commercial real estate professional. Knowledge of the local market is crucial. With the proper guidance investments in commercial real estate can provide superior returns.
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