The world of commercial real estate is complex. Professionals should know the terminology. Here are the various types of commercial real estate.

Multifamily

Multifamily is housing. The purpose of multifamily is an investment. Generally, multifamily is considered commercial if it’s five or more units. Otherwise, it is a residential property.

There are various types of multifamily. Low-rise apartments are 3-4 stories and typically do not have an elevator.

Mid-rises are 5-12 stories and do have elevators. High rises are usually professionally managed. If they are taller than 40 stories, they are considered to be a skyscraper.

The leases of multifamily are typically shorter than other types of commercial. They’re often easier to fill as long as multifamily is well maintained and part of an urban area, it won’t sit vacant for long.

Office

Offices are locations for professionals to work. An office building could have a variety of white-collar businesses in it.

Office buildings are usually put into three categories: A, B, and C. Buildings have the best locations close to amenities. The building is either newer or well maintained, and they attract the best tenants. C buildings, on the other hand, need some work. They’re usually not in a great location. B buildings are somewhere in the middle.

If you want stable cash flow, you might want an A building. If you want more reward and are willing to take on more risk, look at C buildings.

Industrial properties vary in size tremendously. Heavy manufacturing requires extensive renovation between tenants. Properties can also be light assembly and warehouses.

Retail

These everyday shops and restaurants. It can be everything from stand-alone stores to regional malls. Many locations have an anchor tenant, a branded retailer used to bring in customers.

Hotel

There are various categories of hotels. Full service and limited service are on opposite ends of price. Extended stay offers rooms with a kitchen and often stays last weeks if not months.

Mixed-use

This is a mix of types. A very common one is a store or restaurant on the bottom with an office or residential on top.

Special Purpose

This includes properties not categorized here. This includes stadiums, theatres, bowling alleys, and amusement parks.

There are many terms in commercial real estate. Professionals should learn the various types.