Commercial real estate, or CRE, is a broad class of property that businesses lease
for their operations. It can include everything from retail and office space to
warehouses and hotels. CRE is often more expensive than residential real estate and
can be a good way for investors to generate income and diversify their portfolios.
Typically, real estate brokers who specialize in CRE work with clients who are looking
to buy, sell or lease commercial property. These brokers can also help clients find
the right financing for a commercial property purchase. In addition to these services,
CRE brokers can also provide investment analysis and advice on how to optimize a
commercial property for its best use. For more https://www.sentry-realestate.com/sell-your-house-fast-for-cash-rosenburg-tx/
Local zoning laws determine whether an area is zoned for commercial or residential
property, and these laws often slot areas into one of six different commercial real
estate types: retail, office, industrial, multifamily (often known as apartment
buildings), and hotel/resort. Within each of these types are further sub-types that
can narrow a prospective investor’s options.
For example, office spaces are used for business offices and usually have long term
leases. Warehouses can hold a large amount of inventory, including raw materials
and finished goods, for delivery to customers. And flex space properties, which have
a mix of office, warehouse and storage areas, can be used for a variety of purposes,
such as the showroom and shipping facilities of an importer.
Many commercial real estate investments are managed by private owners or
syndicators, rather than REITs or publicly-traded funds. This is because commercial
property is generally considered more risky than residential real estate and investors
may need to provide more personal information, such as financial records and credit
history, to qualify for a loan. Additionally, there is a higher minimum investment
requirement for commercial real estate.
Those who are looking to invest in commercial property can do so directly by
purchasing the actual physical asset, or they can do so indirectly by investing in
securities of REITs and other real estate investment trusts. Those who invest directly
in commercial property need to have access to significant capital and have
knowledge of the industry.
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The key differences between commercial and residential real estate are the size of
the units, the type of tenants and how the properties are used. Residential real
estate includes single-family homes and rentals that contain between one and four
units, such as condos or duplexes. Commercial property includes apartments,
offices, warehouses, hospitals and retail stores. Some other examples of commercial
real estate are auto dealerships, manufacturing plants and specialized facilities like
cold storage and airports. While it’s possible to invest in both types of real estate, it
is common for investors to focus on a particular type or sector because it offers
more potential for growth.