Commercial real estate is a complex investment. There are many types of commercial real estate property to choose from, and you need to know the differences between them before investing in properties.
In this blog post, we will discuss the two other types of commercial property—multifamily rental units and retail spaces. We’ll talk about what each type of building might offer an investor and the financial risks that come with it.
In general, living space is not considered a commercial property. However, any apartment building with four or more separate units meets the criteria for commercial real estate. These complexes run the gamut from low-rise garden apartment rentals to sleek high-rise condominiums.
Three types of multifamily structures:
These multifamily rental properties can be further classified on a scale that goes from A to D. Class A is the cream of the crop in terms of age, quality, and location. Class B falls somewhere in the middle and Classes C and D are usually older buildings in less desirable locations that need more help in terms of maintenance.
The retail type of commercial property covers a broad range of sales and services. That small boutique you love, your favorite take-out place, the veterinary clinic on the corner and the funeral home down the street are all examples of retail establishments. Most business owners lease their properties. So, retail space can be a lucrative venue for investors.
Types of Retail Spaces:
Note: Depending on their size and character, malls and strip malls usually have one or more anchor stores.
Learning the different property types of commercial real estate helps investors decide on what type of investment suits their business goals. All the four main types of CRE properties give investors the opportunity to generate passive income and build wealth over time.
Contact a trusted partner to learn more about how these properties may benefit your portfolio strategy. You need a team of experts ready to work with clients who want help building their assets through CRE investments. Start a conversation today.