Facts About Commercial Real Estate

Commercial real estate encompasses all that property, which is meant for earning revenue. The revenue can be either the commercial real estate lease or rent. These properties include hotels, complexes, office spaces, boarding and lodging, warehouses and a host of other such properties from which a steady flow of income is generated. So here are some facts about these commercial real estate properties which you should know:

  1. Categorised on the basis of value:
    The commercial sector is classified on the basis size and the value of the property. Most of the smaller sized buildings are well over $2.5 million and provide a floor space of less than 10,000 square feet. The larger ones are over $2.5 million in value and much larger in space than 10000 square feet.
  2. Smaller properties have more value:
    70% of all commercial properties consist of small size commercial buildings. These are readily saleable and also go off on lease pretty quickly as compared to the bigger properties.
  3. Recovery rate:
    Although the revenues generated by smaller commercial complexes are quicker, when it comes to recovery, the larger commercial complexes are way ahead. It has been observed during times of recession, that commercial properties are much quicker to recover the losses and generate revenues, which bring them back to stability.
  4. Types of commercial real estate:
    Commercial real estate is classified into six categories on the basis of their usage. The categories are as follows – Retail, Commercial, Industrial, Multi-family, Land, Miscellaneous.
  5. Factors influencing costs of commercial real estate:
    It’s not surprising that a whole lot of other factors influences the costs of real estate. Some of these factors include the prices of real estate properties, supply and demand aspects. All of these cumulatively work towards plummeting or spiking real estate prices.
  6. The best source of income:
    Commercial property is forever a revenue-generating source – you never run out of income if you own a commercial property. Even if it is meant for a specific purpose, remaking it to meet other criteria is not a task. This adaptability of commercial real estate is what makes it a steady flow of income.
  7. Location matters a lot:
    The commercial properties on the front lines – located on main roads, junctions and other prominent locations are usually of high value when you purchase them But if you gauge the returns, they are pretty high too. Location of the property makes it expensive but fetches you returns in ten folds too.

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