Buildings or land intended to generate a profit for investors, either from rental income or capital gain. Types of commercial real estate include office buildings, retail properties, industrial properties, apartments and hotels, as well as specialty niche property categories such as healthcare, student housing, senior housing, self-storage, data centers and farmland.
Frequently Asked Questions (FAQ)
What is commercial real estate?
Commercial real estate (CRE) refers to income-producing property used for business purposes rather than residential occupancy. Common examples include office buildings, retail centres, warehouses, hotels and multifamily apartment communities.
What is the difference between commercial and residential real estate?
Residential real estate is primarily used for people to live in, while commercial real estate is used for business operations or investment purposes. Larger apartment buildings are generally classified as commercial because they generate rental income.
What are the four main types of commercial real estate?
The four traditional commercial real estate sectors are:
- Office
- Retail
- Industrial
- Multifamily
Many investors also include hotels, healthcare, self-storage and data centres as major commercial property sectors.
Is multifamily considered commercial real estate?
Yes. Apartment buildings with multiple rental units are generally classified as commercial real estate because they operate as income-producing investment properties.
Why do investors buy commercial real estate?
Investors typically purchase commercial property to generate rental income, achieve long-term capital appreciation, diversify investment portfolios and hedge against inflation.
