What Is Commercial Real Estate

Before determining what a commercial property is, let’s explain, what is called “real estate” in principle.

Real estate is property objects that are defined by law as real estate. The list of immovable property includes buildings, lands, forest plantations, constructions in progress, as well as water resources, and even ships and watercrafts. It also may be an apartment for rent which can be shared with people of different roommate types.

Commercial real estate is lands or buildings that are used for commercial activity for receiving profits, rental income.

Commercial real estate implies office buildings, hotels, industrial buildings, shops, shopping centers, warehouses, farms and garages. In short, we can say that any building which is not a permanent home, cottage, private garage, or land intended for personal use is a commercial property.

What Is Commercial Real Estate

Commercial property is divided into six categories.

1. Leisure. It includes cafes, hotels, restaurants, sports facilities and so on.

2. Retail. It includes different shops, shopping malls and retail stores.

3. Office.  It includes serviced offices and office buildings.

4. Social. These are swimming pools, medical centers, airports, golf clubs and so on.

5. Industrial. These are warehouses, industrial property, distribution centers, garages.

6. Apartments. This category includes multifamily housing buildings.

Among the categories mentioned above only the following: leisure, retail, office and industrial are directly related to commercial real estate, the rest two are rather residential areas of social objects that may be used commercially for profit.

Commercial real estate also includes land and other natural forests, separate water objects, perennial plants and other assets that are closely associated with the earth and anything attached to it (e.g., facilities, structures, buildings).

This property implies receiving a steady income in the commercial use of real estate, which also includes property rights, ships, aircrafts that are subject to state registration, and space objects.

Commercial real estate also includes residential property, provided that its use is profitable. For example, a multi-strayed residential building is ranked as commercial real estate, but every single apartment is a private dwelling.

The construction of a multi-storied building is an investment project in the sphere of real estate (ranked as a commercial). However, at the same time an apartment is a residential real estate, and after all the apartments are sold, the project ceases to be commercial and enters the section of private and residential real estate.

As a result, commercial real estate is a good way to invest in a profitable venture for the purpose of fast enrichment.

Purchasing commercial real estate in any city you should see the list of commercial real estate in Toronto, for example, and pay attention to the following parameters:

– Location, which is one of the main criteria that promotes rapid return on investment

– Good driveways and sidewalks convenient for both motorists and pedestrians.

– External surroundings of the building (parking lots, availability of public transport).

All this has a positive impact on improving the profitability of the use of commercial real estate.