There are various types of commercial real estate (CRE) that can give you a great return on investment. Usually, people wanting to get started in the real estate investment market think of large shopping malls or multi-story office blocks in the city’s downtown district. However, there are a many different types of commercial real estate that you can start investing in.
Knowing more about commercial real estate can help you determine which type is best for your investments.
Retail
Retail CRE is probably the type that most people think of. After all, we all visit some kind of retail center or outlet regular to buy supplies and go shopping. Let’s briefly look at some types of retail real estate.
Strip center
This is a retail property that usually has an anchor tenant. An anchor tenant is a large, well-known establishment that will bring in customers to the strip center. For example, Home Depot is an example of an anchor tenant. In strip centers, you will usually find a mix of restaurants, beauty salons, and smaller retail stores.
Power center
Power centers are usually larger shopping malls that have a mixture of retail stores and a few larger retailers. They are often located in the suburbs and are popular with consumers because they are easy to get to and provide everything under one roof.
Office Commercial Real Estate
The next most popular type of CRE is office buildings. These are found in most downtown districts of large cities and may be located in a central business district (CBD).
However, because of the cost of prime real estate, many office buildings are being developed in the suburbs. These usually include a collection of building with many different types of businesses. You will often find restaurants, dry cleaners, hair salons, and small stores to fulfill the needs of employees.
Industrial real estate investments
Properties for industrial use generally are some of the most diverse types of commercial real estate. On one end of the scale are large properties that house factories or large manufacturing establishments. These types of properties require considerable investment and may be difficult to maintain.
Very popular for commercial real estate investment are properties for warehouses or storage. With more and more businesses taking advantage of online retailing, storage space is becoming more and more popular. Very often, it is easy to convert existing industrial properties into real estate. For many investors starting out in commercial real estate, converting buildings to storage space is a great starting point.
Other Types of Commercial Real Estate Investment
Apart from the above-mentioned types of commercial real estate properties, there are other types of investment opportunities that are more specific. Some of these are:
- Apartment blocks that house many families. Depending on the type and area, the apartment blocks may contain retail establishments or may be professionally managed.
- Land represents another investment opportunity. Buying land for investment means being able to predict the type of commercial business that will be successful and know about the city’s zoning laws.
