Commercial real estate is a legal term that refers to commercial land, buildings, and other immovable properties that are utilized for business purposes. Commercial real estate properties are mainly used for office spaces, retail store locations, or investment properties.


Commercial Real Estate for Beginners

The tenants who occupy these commercial spaces are usually the business owners who have their corporations or limited liability companies. Commercial real estate is different from residential properties in that they are not utilized as homes but rather as offices, retail spaces for transactions, storage facilities, etc.

Commercial properties are often leased to companies rather than owned by them, though exceptions depend on particular circumstances. For example, many shopping centers are owned by the same company that operates the stores; however, others may be owned by investors who rent out shop space to merchants.


Types of Commercial Real Estate

Commercial real estate is often separated into two different types: commercial and industrial. Each can be further divided into various property types, such as retail or business parks.

Commercial real estate refers to any property that has been developed with a specific purpose in mind, like retail space or office buildings.

Industrial real estate refers to buildings that are suited for manufacturing or production. The most common type of industrial property is an industrial park where multiple companies operate under one roof.


Who Should I Consult About Commercial Real Estate?

Commercial real estate agents are real estate brokers who specialize in selling commercial property. These professionals are also often referred to as business brokers or commercial brokers. Some of the benefits of hiring commercial real estate agents include:

  • They can assist with the sale of income-producing properties, such as office buildings, apartment complexes, retail stores, warehouses, and other similar types of commercial space.
  • They can help buyers find their perfect business property by using their area’s knowledge of commercial real estate listings.
  • They will be able to give you information about the pricing of the business property you are interested in buying to negotiate a price with the owner.
  • Commercial agents can also help sellers get top dollar for their property to sell quickly and for the best price possible. A commercial agent will explain how your business property fits into the current market conditions so that you can make an informed decision on what type of property to buy or sell.
  • Commercial agents will advise you on what type of financing options are available for your intended purchase or sale.

Finding commercial property for sale in the right location can be difficult, but a few tips can make it a lot easier.


Factors that Determine Commercial Rent

Step 1: Location

The first step in determining commercial rent is to know what others are paying for the same property. Generally speaking, if a property is in a good location, it will cost more to rent than a similar property that is not as well located.


Step 2: Size and age of a building

The second factor in determining commercial rent is the size of the building and how old it is. Generally speaking, newer buildings will cost more to lease than older buildings of similar size and quality.

Step 3: Condition of building

When a commercial property is being leased, the condition of the building is a primary factor in determining the rent. The more deteriorated the building, the lower the rent will be.

Whether you are considering buying or selling your own commercial real estate, or if you are involved in the industry of commercial real estate, it is important to have a clear understanding of all aspects.

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