Commercial real estate is one of the three primary types of real estate. The other types are residential real estate, which is used for living purposes; and industrial real estate, which is used for manufacturing and production. The businesses that occupy commercial real estate usually lease the space.
Commercial Real Estate generally can be defined as any property owned to produce income.
From an investment point of view, commercial real estate encompasses any kind of property, including land, which brings or has the potential to bring income. From a business point of view, commercial real estate is any offering of office, retail, industrial, medical, hospitality, and other commercial space that can be leased (and sometimes bought) for the use of the business.
Commercial properties can be classified into six main categories: office, retail, industrial, multi-family, land, and a miscellaneous catch-all category that includes everything else.
Commercial real estate office properties include single-tenant buildings, small professional buildings, skyscrapers, and everything in between.
Office space in commercial real estate is not restricted to metropolitan areas; suburban office buildings dot the landscape everywhere there are residences to support them. These buildings are usually mid-rise structures from 80,000 to 400,000 square feet, located outside the city centre and into the suburbs. Office complexes, often with serene, campus-like settings, are also included in this category of commercial real estate.
Retail or restaurant sites can be freestanding, like a bank or restaurant building. They are often found on the lower floors of office buildings or multi-family structures, especially in urban areas. Businesses can pinpoint their ideal retail space from any of these options, but investors will be drawn to malls and retail centres, which have many tenants and therefore are a better risk.
Industrial properties range from smaller sites that are often termed "flex" space or "R&D" properties; to warehouses; to large, heavy manufacturing sites. These spaces are often listed with clear height specifications, or the height from the floor to the lowest-hanging overhead obstruction, which could be 14 feet in a small building to more than 40 feet in a large industrial space.