Commercial Real Estate Property Types

Commercial real estate covers a diverse group of structure types and uses, as well as vacant land. Learn specifics about some of the most common ones here.

These categories are discussing the sale of "real property", the land and/or buildings. Though business owners frequently sell their business entity together with the real estate, the valuation of the business enterprise itself is not treated in this discussion.

Multi-Family Commercial Real Estate

Condominiums. iStockPhoto

Multi-family commercial real estate property types include duplex homes, and other construction for habitation by mulitple family groups. Condominiums are frequently called multi-family because of their construction as a group, but are normally listed and sold as single family residential units. Duplex homes are also frequently listed and sold as residential units to a buyer that lives in one side and rents out the other.

Multi-family properties are a logical next step for small investors who want to move up from single family homes.  They can get more bang for the buck due to economies of scale.  Many times partnerships will be formed in order to invest in multi-family properties.

Retail Space Real Estate Properties

Commercial building in strip mall available for lease

This category would include single buildings used as stores for clothing, electronics and other consumer products, as well as malls, strip centers and the like. Restaurant spaces are a specialty subset of the retail category, with some listings shown as restaurant/retail. Valuations can be based on size and land value, retail sales per square foot or other investment return calculations.

Location is extremely important to retail space tenants.  They need foot traffic or at least exposure to pull people to the parking lot to shop.  For malls or strip centers there is often an anchor tenant.  It's a larger and very popular retailer.  This "anchors" the center and the other merchants that are attracted to lease are often in related businesses.  An example would be a major department store as an anchor with jewelry, clothing and shoe stores around it.

Office Buildings and Office Complexes

Office space

A single building designed for office use, or a group of offices in a single building or cluster of buildings would fall into this category. When offices are grouped in structures with single ownership, they are listed as commercial office rental property. The owner derives income from the rental payments of the office tenants. These can be valued based on the rental income return on investment, rather than methods using square footage and land value. Medical & Dental offices are a subset.

Office buildings can be oriented to general offices, normal business activities with desks, printers, copiers, etc.  Others can be very niche focused.  Medical offices need special equipment and the power and outlets to service it.  

There are many office structures that serve small consulting and accounting businesses.  They each occupy a small space and share common conference rooms and often a receptionist and reception area.  Unlike a retail center, the tenants will need their own independent access at any time of day or night, as they have different work styles and customer types.