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Types of Commercial Real Estate You Should Know

Do you want to invest in the commercial real estate? In order to make huge profits, you must be aware of which type of CRE you’re inclined towards

Typically, the investors – especially newbies – restrict the commercial property for rent in Dubai to office space for rent in Dubai, shopping centers and warehouses. Commercial properties can actually be broken down into many different categories. The main purpose to invest in commercial property is to generate good profits. If a property doesn’t have enough potential to make a profit either in terms of rental income or property value fluctuation, nobody is going to invest in that.

To get the most out of the commercial real estate, you have to be aware of all the nook and crannies of this particular segment of this industry. Here’re a few types that you might want to have a look at before putting your money in. So let’s dive in;

Offices

Three Main Classifications

When it comes to office buildings, these are mainly classified in three main categories; Class A, Class B and Class C. Although these classifications are very much relative, they also largely depend on the context. When you talk about best construction and beautiful location, it’s Class A offices you’re point towards. Class B offices also have the best construction, but the location isn’t that good. Class C is everything below and apart from Class A & B.

Central Business District (CBD)

The central business district is normally located in the heart of the city, which is also known to be the commercial hub. Perhaps that’s the reason why these spots happen to be very much lucrative for businesses as most of the population heads towards these spots for their commercial needs. Whether in New York or any other state of any Country, these buildings include the high-rise found in the downtown areas.

Suburban Office Buildings

These are the midsized offices’ structures located normally outside the city center. These cities also have suburban office parks that are known to assemble some midrise corporate buildings.

Retail

Strip Center

These are small retail properties that may likely have the anchor tenants as well. What is anchor tenant? He/she serves to draw customers into the property. The most popular anchor tenants are Publix, Wall-Mart and Home Depot etc. Strip centers normally serve a hub of businesses like it can be a mix of small retail stores such as dry cleaners, Italian restaurants, salons, etc.

Community Retail Center: Generally in the range of 150K-350K Sq. Ft, community retail centers can be occupied by multiple anchors. Just like the strip center, community retail center can also have a variety for businesses like drug stores and grocery stores etc. Besides, it’s very much common to find one or more eateries in a commercial community center.

Power Center

This type of retail business model has many smaller, inline stores, but is also distinguished by the presence of some major box retailers like Lowes, Wal-Mart, Staples and Best Buy etc. Typically the big box retailers occupy from 30k to 200k sq. ft. And also contain many out-parcels as well.

Out-Parcel

The large retail centers normally contain one or more out-parcels. These are actually the parcels of land set apart for separate tenants like restaurants and franchise etc.

Regional Mall

Normally ranging from 400K to 2000K Sq. Ft, the regional malls have many anchor tenants like a big-box retailer and department stores etc. This type of business model is often very much popular, and many businesses get inclined towards it. Also in terms of investment in commercial properties, it turns up lucrative.

Special Purpose

When we talk about the commercial properties, the choices are endless. Just a few have been discussed above. Apart from all these, many other types of commercial real estate can also be found that investors construct and own. These are special purpose properties like theatres, marinas, bowling, golf club, nursing home, car washes and self-storage etc.

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Written by Neha Reddy

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