What Is Commercial Real Estate?

What is commercial real estate?

Commercial real estate, or CRE for short, is a type of property that is used to support business activities and generate income by charging companies rent to use it. It can include office buildings, retail properties and industrial complexes.

There are several different types of commercial real estate, but there are eight distinct categories that make up this asset class:

Class A – Newer and High-quality Infrastructure

The best commercial investments have newer buildings in a desirable location, with high-quality infrastructure. These properties can be more expensive, but they also tend to hold their value over time and have a higher rate of return than other investment options.

Class B – Older and Less-Appealing Infrastructure

Class B properties have older buildings in less-desirable locations, with lesser-quality infrastructure. They’re also typically less visually appealing and may have issues with attracting tenants.


Cost: The costs associated with commercial real estate can vary, but most real estate professionals will agree that they’re often more expensive than other asset classes. This means that it’s essential to do your research before making a purchase, and to work with a trusted real estate professional who understands the local market and can help you get the best rate possible for your investment.

Direct Investment: If you can afford to buy commercial real estate outright, this is the easiest route for investors. However, it can be risky, and it isn’t ideal for everyone.

Indirect Investment: A more popular way to invest in CRE is through real estate investment trusts, or REITs, which own and operate a portfolio of real estate properties and then distribute their profits to shareholders. These are often publicly traded companies, so they’re easier for investors to buy and sell shares of.

Crowdfunding: This is a great way to invest in commercial real estate, and there are many different sites available for investors to take advantage of. These sites bring hundreds or even thousands of small-time investors together to pool their money and purchase commercial real estate.

There are several different types of CRE, but most are classified into the following four main categories:


Office buildings are the most common type of commercial investment property. They offer long term leases and high quality tenants, which is important for a successful investment. Must visit https://www.henryhomebuyer.com/anoka-mn/


Industrial Spaces

These are commercial spaces that are used for manufacturing and other heavy industries, such as oil refineries and coal mines. They are typically more expensive than other types of commercial property, but can have a higher rate of return and be a good choice for investors looking to maximize the returns from their assets.


 Mixed-use Properties

These types of commercial properties are usually a combination of the four main categories above, with varying levels of uses. Examples of these are multi-family apartment buildings with retail space on the ground floor, or warehouses and storage facilities that are used for a variety of purposes.


Finally, there are special-purpose commercial real estate types that can’t be easily converted into other uses. This can include church buildings, aquariums and movie theaters, among others.


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