Commercial properties are real estate assets that are used for business or profit-making purposes. These properties are distinct from residential properties and are generally categorized into several types based on their intended use. Here are some common types of commercial properties:

The four main types of commercial property are:

• Office space: This is used for administrative, professional, and clerical work.
• Retail space: This is used for the sale of goods or services to the public.
• Industrial space: This is used for manufacturing, warehousing, and distribution.
• Multifamily: This is used for residential purposes, but it is considered commercial property because it is owned and operated as a business.

If you are interested in investing in commercial property, there are a few things you can do to get started:

• Do your research: Get as much knowledge as you can about the local commercial real estate market.
• Talk to a real estate agent or broker: They can help you find suitable properties and negotiate the best possible deal.
• Get financing: You will need to get financing from a bank or other lender before you can purchase commercial property.
• Hire a property manager: If you do not have the time or experience to manage the property yourself, you should hire a property manager.

Commercial property differs fundamentally from residential property in its purpose and usage. Unlike residential properties intended for personal living, commercial properties serve business or profit-driven activities. Commercial properties include office buildings, retail spaces, industrial facilities, and others designed to generate income.

Lease terms for commercial properties are typically longer, and tenants often bear a share of operating expenses. The valuation of commercial properties considers income potential, while residential properties are often valued based on comparable sales. Understanding these distinctions is crucial for investors, property owners, and tenants navigating the distinct dynamics of commercial and residential real estate.

Commercial property leases have diverse structures tailored to the needs of landlords and tenants. Lease terms, ranging from short to long, set the duration of occupancy. Rent structures vary, encompassing gross leases, where tenants pay a fixed amount covering operating costs, and net leases, which involve additional payments for expenses like taxes and maintenance.

Some leases, particularly in retail, utilize percentage arrangements, tying rent to a percentage of the tenant’s sales. Specific details about responsibilities for expenses and maintenance are outlined in the lease agreement, creating a flexible framework adapted to the unique characteristics of the commercial real estate market.

Due diligence is the process of thoroughly investigating a commercial property before finalizing a transaction. It involves reviewing financial, environmental, and physical aspects to identify potential risks and issues.

A commercial property manager oversees the day-to-day operations of a commercial property on behalf of the owner. Their responsibilities may include tenant management, property maintenance, financial management, and lease administration.