If you’re looking to invest in property for other reasons than using it as a home, it pays to understand the different types of commercial real estate (CRE). There are various reasons for being interested in CRE, but most often, CRE property is used for income-generating purposes.
What is Commercial Real Estate?
The official definition of CRE varies from country to country, but generally, it is classified as larger real estate than a single-family home. There are 7 main categories of CRE: office, retail, industrial, multifamily, land, hotel, and special purpose. These properties are governed by local zoning regulations and often owned by investors leasing the property to relevant businesses.
For nearby Wenatchee CRE, below is a summary of what these properties entail:
| Purpose: | CRE is built mainly to generate income for the investor or the leasee. |
| Occupancy: | Unlike residential real estate, generally sizable apartments and high-rise residential buildings with more than five units are considered multifamily commercial buildings. |
| Lease Length: | CRE leases generally run for at least five to around ten years |
| Rates: | The rate prices of CRE are based on the valuation of the property or the space’s square footage. |
Commercial Real Estate Categories
Commercial real estate is classified using seven main categories.
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Office space:
Office spaces, like those in Leavenworth, which may be sub-classified based on location, amenities, and condition of the building, include office buildings that have for rent workspaces that may be used by businesses. This generally does not include space that is designed for heavy industry.
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Retail spaces:
Retail buildings refer to buildings used for the retail business, ranging from single coffee shop storefronts to full-fledged malls. Some properties would have a main tenant, such as a grocery or department store, that would attract other retailers to set up within the property.
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Industrial space:
Industrial real estate near Cashmere are available for industry use, such as heavy manufacturing, light assembly, bulk warehouses, and flex spaces that contain both office and industrial spaces. These are typically large spaces outside urban areas.
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Multifamily complexes:
Multifamily properties are residential rental properties that are not single-family dwellings. These range from duplexes with two tenants to high-rise condominiums with hundreds of tenants that generate rental income.
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Hotels:
Hotels, whether independent or flagged, can be divided into several categories and subcategories based on services and amenities.
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Special-purpose:
Special-purpose real estate is a commercial property beyond the types discussed above. Some examples may include parking areas, zoos, theaters, and amusement parks. These are commercial properties that do not fall within any of the earlier mentioned categories.
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Land:
This type of property includes any farmland or land which is to be used for agrarian purposes. This does not include having a small garden that can provide a small amount of produce for the home.
When investing in CRE, be aware that there are higher investment and upfront costs, but with the right location and business, and of course a little luck, the return potential is considerable. Armed with the basics of CRE, you can make more strategic decisions about various real estate opportunities.
If you’re in Wenatchee, Leavenworth, Cashmere, and Lake Chelan and are interested in commercial real estate, let Coldwell Banker Cascade Real Estate professionals help you with the task. Call 509.888.8887 or email here to start.
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