Commercial property refers to real estate properties that are primarily used for business purposes. These properties are leased out to provide workspace rather than living space, generating a steady stream of income for the property owner.
Commercial properties can come in several forms, including:
- Office Buildings: These can range from small professional buildings (like a dentist’s office) to large skyscrapers in a city’s central business district.
- Retail/Restaurant: These include standalone shops, large shopping malls, pubs, cafes, and restaurants.
- Industrial Property: These are used for industrial businesses. They include warehouses, factories, and distribution centers.
- Multifamily Housing Buildings: While these might seem like residential property, they’re considered commercial property if they have more than a certain number of units.
- Mixed-Use Buildings: These properties might have a mix of office, retail, or residential units.
- Hotels and Hospitality Buildings: These include motels, hotels, resorts, and any other property type where the property’s income comes from visitor lodging.
- Special Purpose Properties: These encompass other types of businesses not mentioned above, like gas stations, schools, or self-storage.
Investing in commercial property usually involves more complexities than residential investments. This can include bigger cash investments, complex contractual agreements, or zoning laws. However, the potential returns on commercial properties can be higher, making them attractive to real estate investors.