Commercial real estate is a fairly broad category, covering everything from office buildings to shopping centers. Here are three facts about commercial real estate.
- What It Is
There are four categories of commercial real estate: retail, office space, multi-family rentals and industrial space. It is a type of real estate used for business or work purposes rather than residential purposes. Owners of commercial real estate generate revenue from tenants paying rent and from investors. A commercial real estate company Van Buren AR can own several different properties and lease to different kinds of businesses depending on the zoning classifications of the buildings.
Commercial real estate is a popular investment option. You can either invest directly by becoming a landlord or indirectly through commercial property-related stocks. Direct investments work best for people who have in-depth knowledge of the industry, while indirect investment is well-suited even to people who may not know much about the industry itself. Commercial real estate is popular because it’s a relatively stable option in contrast to more volatile stocks. You can gain revenue from selling properties after they appreciate in value or from rent.
- Classes of Commercial Real Estate
Some jurisdictions break the four main categories of commercial real estate down further. Office buildings can be divided into three classes. These are Class A, considered the best buildings in terms of location, aesthetics and infrastructure, Class B, which aren’t as competitive up-front but have renovation potential, and Class C, properties that are located in less lucrative areas and require a lot of maintenance. Industrial properties are commonly broken down into smaller categories too, depending on a jurisdiction’s zoning laws. These categories can include heavy machinery or chemical productions.
There are many opportunities to get involved in commercial real estate, whether you’re a landlord, renter or investor.