One of the main differences between commercial and residential real estate is that commercial real estate is explicitly used for commercial purposes such as for business and has the benefit of generating revenue.
Owners of commercial properties usually get their profits from renting out their commercial property or using it to run their business.
Due to their ability to generate high income, investors often prefer commercial properties over residential ones.
In today’s blog, we bring you a comprehensive guide to help you find out everything there is to know about commercial real estate.
What is Commercial Real Estate?: Types of Commercial Real Estate
This category is extensive, featuring a massive range of properties. Let’s examine all the types.
Offices
This type of property includes urban and suburban offices. Office properties in the city center are typically high-rises with high rents, feature premium facilities, are easily accessible, and are catered to corporate professionals of top-notch companies.
Office buildings in the suburbs are typically either individual or part of an office park. Additionally, boutique offices are another type that cater to particularly smaller companies such as startups and are designed to promote better productivity.
Retail
Accessibility is a major factor in the success of retail spaces. A good location will ensure that the retail spaces have consistent traffic, leading to the success of the business. Retail spaces typically include stores, restaurants, cafes, etc.
Retail spaces have proven to be an excellent long-term investment as they can be leased out for an extended duration, leading to a consistent flow of cash for investors.
Industrial Properties
These types of properties come in a range of sizes and include manufacturing and assembly facilities as well as warehouses. The sudden rise of e-commerce has resulted in many investors recognizing the profitability of investing in industrial properties as they have the potential for longer leases.
These properties are usually located in the peripheries of the city or in industrial zones to help with easy accessibility.
Mixed-Use Properties
Some properties cannot be exclusively categorized as residential or commercial but instead share elements of both categories which is why they are often referred to as mixed-use properties.
A good example of mixed-use properties are buildings with commercial spaces on the bottom floors while the top floors feature apartment units.
Hotels
The hotels and hospitality category isn’t as popular among investors but just like industrial properties and office spaces, it boasts immense potential.
This category includes branded hotels, resorts, casinos, budget hotels as well as boutique ones which have theme-centric designs and are owned independently of brands.
Multifamily Commercial Properties
This type of commercial real estate boasts five or more residential units, none of which are single-family. This category boasts multiple types of residential real estate including townhomes, condos, apartments, etc.
Multi-family properties will always be in demand as living spaces will always be required to house people so the investment potential of this type of commercial real estate will always remain high.
Special Purpose
Commercial real estate that does not fit the types mentioned above is referred to as special purpose. These types of facilities or spaces usually are meant to be used for a specific purpose such as spaces used for exhibitions, fairs, or buildings used for churches, etc.
Commercial Real Estate: Why You Should Invest
To begin with, what makes commercial real estate more profitable is that it generates much higher returns than residential real estate. A major reason for this is that commercial real estate has a much longer lease period which also makes it a source of robust income for investors.
Another point to note is that commercial real estate shows impressive appreciation in the long term and isn’t as sensitive to economic fluctuations.
Conclusion
Understanding all the different types of commercial real estate can better help you identify various investment opportunities and recognize their true potential. Not to mention, you can even acquire the maximum amount of revenue by tapping into this market and elevating your portfolio.
At Prime Property Turkey, we have a team of seasoned experts who know the Turkish property sector inside out and can steer you on the right path to a successful investment. Get your appointment with us today!
