What is Commercial Real Estate?

what is commercial real estateWelcome to the exciting world of commercial real estate! you know more about it than you realize. Do you shop? Do you enter office buildings? Do you live in an apartment? Perhaps you own or rent warehouse space, retail, or office space?

Unlike residential real estate, which is based upon personal desires, commercial real estate is leased or purchased by businesses who select the space they do because it is right for their business. Is there a reason a grocery store wants to be on a certain corner? Why do all the drugstores seem to be near each other? Why is their a Burger King next to every Mcdonald's? Is one corner better than another? Is the location of the skilled labor pool critical for a large manufacturer? The answer to all of these questions is Yes!

The term commercial when referring to real estate can mean different things in different places. Most people use the term to refer to nonresidential property. In some cases, the brokerage of large multifamily properties such as apartment complexes, is included as part of commercial real estate because the brokerage is considered investment sales. The purchaser is typically an institutional investor, such as a  pension fund, real estate investment trust (REIT), or a life insurance company.

In commercial real estate, there are even more avenues and more distinct types of avenues than in residential real estate. The following are some of the major categories of commercial real estate.

  • Land
  • Retail 
  • Office Buildings
  • Industrial & Warehouse Developments
  • Institutional
  • Investment
  • Resort/Recreational
  • Multifamily properties
  • Special Use Properties (e.g. Churches)

Keep in mind that these categories overlap and there can often be sub-specialties within each category. If you would like to know about the Austin commercial real estate market feel free to give us a call.

 

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