It’s not easy to find immediate success in the commercial real estate field. If you’re a newbie commercial realtor, learning may seem like an endless process. One of the first things you should learn about is the different types of sectors that comprise commercial real estate.
As a real estate investor, you may invest in offices in the commercial category. Another option is to invest in factories and ranches. Every sector equates to a different kind of property. Each property has the potential to produce profit through rental income or capital gain.
1. Office
In general, offices are categorized into type types: suburban or urban. Suburban office buildings are small and are usually grouped. Urban offices, on the other hand, are often located in high-rise properties.
Office establishments can be single-tenanted or multi-tenanted. They are ranked in three tiers:
- Class A: They have advanced systems, premium finishes, and exceptional accessibility. These offices also charge higher rents.
- Class B: Class B establishments have adequate systems, fair finishes, and average-range rents.
- Class C: This is the lowest office building classification. They often require vast renovation and are located in less desirable places.
2. Retail
Retail establishments house the restaurants and stores that we frequent. They can be standalone (single use), or multi-tenanted. The retail sector is dictated by several metrics, including the trade area, the number of tenants, concept, and size. Malls and shopping centers fall under this umbrella.
3. Industrial
Industrial establishments are typically located along major transportation routes. They are home to the industrial operations for several tenants. These properties are classified into four types:
- Light assembly: Not customized, and can be used for storage or product assembly.
- Heavy manufacturing: They are heavily customized. Most of the time, heavy manufacturing facilities are used by machinery manufacturers to operate and produce products.
- Flex industrial: These establishments are a mix of both office and industrial spaces.
- Bulk warehouse: Bulk warehouses are big properties used as distribution facilities.
4. Multifamily
Multifamily establishments cover all kinds of residential real estate outside of the single-family sector, including townhouses, co-ops, condominiums, apartments. Just like offices, these properties can be categorized into Class A, B, and C. They may target a specific population segment and may be customized for subsidized housing, senior housing, and student housing.
5. Hotel
This sector covers properties providing meals, accommodations, and other similar services for travelers. A hotel may be independent or flagged. A flagged hotel is a part of a major chain of hotels, similar to Hilton or Marriott.
6. Special Purpose
A special-purpose property may be purchased by commercial real estate investors. However, it doesn’t fall into any of the above-mentioned sectors. Bowling alleys, churches, amusement parks, and self-storage facilities are examples of special-purpose properties.
Thinking of investing in a new commercial real estate property? Reach out to Lovely LaGuerre today at 702-340-7384 or email Lovely@Lovelysellsvegas.com to make an appointment.