Effective commercial real estate investments are built on knowledge. Understanding the ins and outs of different commercial property types is one of the most fundamental building blocks of your education and your success in this field. Let’s take a look at six kinds of commercial spaces:

1. Office

A lucrative niche, office spaces have several classifications that are important to know:

  • Class A, B, or C. This refers to the age, condition, location, and amenities offered within an office building. A Class A building, for example, is the best of the best. It is newer, up-to-date, and advantageously located. A Class B may be located in a less favorable neighborhood or require more intensive maintenance. Class C can be a good opportunity for investing in an area that’s on the verge of growth.
  • CBD. Office buildings located in the “central business district” are in the heart of the city and typically feature high rises.
  • Suburban. Buildings are located outside of the city center or downtown and are typically mid-rise structures.

2. Retail

Retail spaces vary significantly: they can be single-use, standalone buildings or  multi-tenanted (e.g., a mall or retail center). From power centers - retail centers with a few big anchors, such as Walmart, Lowes, Staples, etc. - to community centers that feature banks, grocery stores, etc., these commercial spaces run the gamut.

3. Industrial

There are several subcategories in the industrial arena of commercial property types, including:

  • Heavy Manufacturing. These are customized to house machinery manufacturers.
  • Light Assembly. Less specialized than heavy manufacturing, these facilities can be used for product assembly and/or storage.
  • Bulk Warehouse. These spaces are typically quite large and used as distribution centers for companies like Amazon, Walmart, etc..
  • Flex. Here, the property includes a blend of industrial and office spaces.
  • R&D. Research and Development spaces are highly specialized for particular types of industry (e.g. medical research, aeronautics, etc.).

4. Multi-Family

These spaces also cover a wide variety of needs, from condos to high-rises:

  • High Rise: These have nine or more floors with one or more elevators.
  • Mid-Rise. Usually located in an urban center, these are multistory structures with an elevator.
  • Garden Style. This is defined as a one, two, or three story building. An elevator may be present.
  • Walk-Up. As you’d guess, there’s no elevator here! But there are four to six stories.
  • Manufactured Home Community. An operator leases land sites to those who own manufactured homes.
  • Special Purpose. These spaces are tailored to the needs of specific communities, such as seniors, students, or low-income people.

5. Hotels

The major classifications here are:

  • Full Service. These spaces include amenities like room service and an onsite restaurant.
  • Limited Service. These hotels do not have room service, restaurants, or a concierge.
  • Boutique. Boutique hotels are not part of national changes, typically have fewer rooms, and offer a full range of amenities.
  • Casino. You’ll find slot machines, video poker, or other gaming features here.
  • Extended Stay. These offer fully equipped kitchens and larger rooms as they are designed for long stays.
  • Resort. Resorts are typically large and advantageously located with golf courses, water parks, amusement centers, and a full suite of amenities.

6. Special Purpose

This is a rather catch-all term that essentially includes everything that falls outside the categories mentioned above. Churches, amusement  parks, car washes, bowling alleys, and community centers, for example, are considered special-purpose.

Which types of commercial spaces are you interested in? Contact Keller Williams Commercial Real Estate. Our team has extensive experience in all aspects of the commercial real estate industry. We’ll help make the deals that drive your goals forward.

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