Commercial real estate (CRE) is a broad category that includes any building or land
that is used for income-generating activities on a large scale. This can include
everything from small stores to huge restaurants, shopping malls and resorts. It is
more difficult and expensive to finance than residential real estate, and its
properties have a wide range of operational quirks and risk profiles that make them
distinct from other types of investments.
CRE investors have a number of different options for investing in this asset class.
They can purchase and manage property themselves, invest in a passive manner by
purchasing shares of real estate investment trusts (REITs) or other private equity
firms that specialize in the sector, or work with an experienced broker to find a
suitable deal.
The most well-known type of commercial real estate is retail, which consists of
buildings that host the restaurants, stores and other businesses we frequent on a
regular basis. These properties can be multi-tenant, like a shopping center with a
number of different retailers, or single-tenant buildings within the same complex,
such as a bank branch or drug store. The retail sector is a popular choice for
investors, because it provides reliable rent income and offers a diversification of
tenant risk that protects against a slowdown in the economy.
Industrial is another important sector of CRE, which consists of spaces that support
manufacturing and other industrial activities. These types of properties are usually
highly regulated by local zoning laws and must be located in areas that can
accommodate them, such as near shipping ports. These properties can range from
heavy manufacturing to light assembly, and can also include bulk warehouse
structures and storage facilities. The industrial space is an essential part of the local
economy, and its demand is a strong driver of job creation in urban areas.
Office buildings are an important type of commercial real estate, primarily because
they contain workspaces for business tenants. These spaces can be leased by
individual businesses, or by corporations that need to locate all their employees in
one place. They are a desirable investment for their long-term leases, high quality
business tenants and the scale that comes with having all business operations under
one roof. For more https://www.modernpropertysolutions.com/sell-my-house-fast-south-kingstown-rhode-island/
Lastly, the multifamily sector consists of apartment buildings and other types of
residential real estate that are used to house multiple families, such as condos and
co-ops. These buildings can be high-rise or walkup, and are typically zoned to allow
them to cluster in specific neighborhoods of a municipality. Affordable housing is a
subset of this category, as are manufactured homes and senior living facilities.
Special purpose property, which includes a wide range of items from churches and
movie theaters to bowling alleys and self-storage facilities, is also an important
segment of this industry. Many of these properties operate on a seasonal or
temporary basis, but provide a steady flow of rental income that can help offset the
costs of owning and managing such property.