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Commercial buildings are income-producing real estate that is mainly used for business purposes such as office buildings, retail spaces, warehouses, hotels, and mixed-use type properties.



We Office Buildings are common are a common type of commercial building that can be only one story, a business condo, or a high-rise building that can be rented out to a single tenant or multiple tenants. The amenities are usually minimal a basic shell with restrooms and the tenant or landlord will do the improvements based upon the lease structure.


Restaurants are another common type of commercial building that can contain one or more restaurants per property or combined in retail or mixed-use environments. Restaurants are a complex and advanced type of commercial property that requires knowledge in various aspects due to the requirements of each new tenant and improvements that may be required by the owner to build out and incorporate that cost in the lease for recovery purposes.


Retail Spaces are a common type of commercial property that is any type of store or shop that almost always has a storefront. This can range from a small barbershop to a big box store, a small strip center to a large shopping mall.


Hotels and Lodges are another type of commercial property that has a very specific use and are generally designed for fast turnover or temporary occupancy at a higher daily rate than let’s say an apartment that is rented on a longer-term basis. Hotels can vary from a single level with few units to High Rise with restaurants, retail, and condominiums located within the property. They can be budget, extended stay, limited or full service.


Warehouses are commonly more in the industrial areas, can be used for storage for other businesses, keeping stock, and landing point for a retail business that ranges in size and amenities depending on the use, some are climate controlled.


Industrial buildings are generally related to the use of manufacturing, facilities that have workshops inside, and understanding that some warehouse types can also have an industrial classification based upon the use. One example is RV storage, even though manufacturing is taking place that is usually the classification needed to acquire the proper permits. With industrial buildings, there is a certain amount of chemicals, noise, and other hazards that are expected and usually separated from residential neighborhoods.


Flex space can be explained similarly to mixed-use properties where you may have a manufacturing portion for the development of a product, offices for admin, and a showroom for sales all under the same roof.


Healthcare or Medical buildings such as small offices to Hospitals and clinics are commercial enterprises aimed at earning money and serving clients which gives them the commercial classification.


Commercially Zoned Homes are all over and the commercial districts have impeded the residential nature of the area due to later demand. These are usually occupied by accountants, attorneys, termites, contractors, and generally smaller, local professional service companies. The backyards are typically transformed into parking.


Self Storage and RV Storage are generally classified as commercial business and industrial property types due to the general classification by cities for permits. These assets can be either both indoor and outdoor, some with climate control on one level or multi-level structures.


A few examples of special purpose buildings would be casinos, churches, schools, airports, bowling alleys, etc.


A commercial lease is a contract of terms and uses that a business owner signs with an owner or property manager for the space in which they want to occupy. The biggest difference between a commercial and residential lease is that there are not the same consumer protections required for residential use. A commercial lease is usually more complicated with many more aspects, terms and they way the rent is paid, in some cases the landlord will receive a percentage of the income from the business.




Office building classes are generally classified as A, B, or C class buildings. What makes the difference is the level of price, quality, and amenities offered, and keep in mind that a large metropolitan city classification may vary from a small more rural beach town.


A Class A building will be the newest and most state-of-the-art office building in the area, mainly consisting of top-quality construction, a great location with a high visible appeal with ample parking, and the latest in security, communications, energy efficiency, and amenities offered. These tenants are usually prestigious clients such as well-known brands that may be considered anchor tenants and the most expensive rents, significantly above the market average.


A class B building will usually have a good to fair visual appeal with moderate amenities that could be slightly older and can return to a Class A building with renovations. A Class B building is usually rented by mid-market clients such as smaller, local business that does not have the financial backing of a larger company.


A Class C building generally needs substantial renovation or improvements, has little to no parking, and has much fewer amenities in less desirable areas. Generally, a Class building can be renovated back to a Class B building but rarely to a Class A.

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