When you hear about real estate, the first thing that would probably come to your mind is the housing market or residential properties. But, what about the other side of it - what do you know about commercial real estate? What are the types of commercial real estate? Should you invest in one?
In this blog, you’ll learn what commercial real estate is, know the major types of commercial properties that exist as well as the basics of investing or managing commercial real estate.
What is commercial real estate?
As commonly defined, commercial real estate is any property or space that is used for business and not for residential purposes.
Commercial real estate includes gas stations, office buildings, retail stores, restaurants, and even multi-family residential units.
What are the different kinds of commercial real estate properties?
Retail
Retail stores are the most common example of commercial real estate. These can be standalone stores and spaces that can be found in strip malls. There may also be restaurant tenants within the said strip malls.
Offices
The price per square foot of office spaces and buildings can vary depending on size, amenities, and location. Meanwhile, specialty office spaces like medical offices can be even more expensive for tenants to rent.
Office buildings can also range from brand new to secondhand that need repair or complete renovation. According to property experts, a brand new building with modern amenities or a building that has just been renovated could be considered Class A, especially if it is situated in a prime location. Class B buildings can be an investment, with only some renovations and improvements needed to bring it up to higher value. Class C office buildings, on the other hand, will need some serious renovation and may not be in a very desirable and strategic area.
Industrial
Aside from manufacturing, industrial commercial real estate property can also include warehouses and spaces that can be easily transformed. These industrial properties are considered as more viable opportunities for investors as compared to specialized manufacturing space.
One thing to remember about industrial commercial real estate is that the easier it is to repurpose, the easier it is to rent out.
Multi-family
Multi-family residences are also classified as commercial real estate. These include apartment buildings, both high-rise, and low-rise, which have shorter lease terms compared to an office space. Tenants will need to renew their lease every year with the landlord or property management company. This is different from a business that may want to rent an office space for several years.
However, the nature of these leases makes them less viable as investments, not to mention that they have their own regulations and codes that are specific to them.
Undeveloped land
Land can be considered as untapped potential for commercial real estate. Such land can be developed and turned into anything, from a grocery store to a hair salon, depending on the business requirements of the owner.
If you plan to invest in undeveloped land, you have to remember that it can have some specific needs before it can be developed. Some need clean-up while others can become a vacant lot where there was once a piece of property. Keep in mind that there may be some environmental considerations to take into account first before any development can proceed.
Investing in Commercial Real Estate
Commercial real estate can be an attractive and lucrative investment opportunity. However, there are some types of commercial real estate that are better opportunities than others.
If you are considering commercial real estate investment opportunities, treat it as you would any other investment. It is better to get advice from players who are already established in the commercial real estate game. You should also do your research and due diligence before investing in any property.
You also have to keep in mind that it will take more funds to invest in commercial real estate property than residential, but it still provides income like residential investment properties. If you plan on investing in commercial real estate properties, you need to do your research and prepare enough money.
Managing Commercial Real Estate
Owning a piece of commercial real estate means maximizing the return on investment with rent. What the landlords usually do is to minimize turnover and keep tenants happy to accomplish such a goal. High turnover rates can greatly affect the business, especially if the space needs to be renovated over and over again to fit a new tenant’s needs.
Some landlords employ a commercial real estate firm to manage all aspects of managing their property. A professional commercial real estate firm has the know-how and insight to keep tenants happy and find new ones. Plus, they also have the right connections to find those new tenants and know local rules and regulations for commercial real estate.
When it comes to commercial real estate, there are a lot of things to consider - think about the different types of commercial real estate available in the market and go beyond office spaces and shopping centers. If you are looking at investing, commercial real estate can represent investment opportunities for landlords and a place to grow a business for tenants.
If you’re looking for investment opportunities, don’t limit yourself to just commercial real estate properties!
Vista Residences is the condominium arm of the country’s largest homebuilder, Vista Land & Lifescapes, Inc. that offers ready for occupancy and pre-selling condominium projects in Manila, Makati, Mandaluyong, Quezon City, Ortigas, Baguio, Cebu, and CDO that are strategically located within major cities, in close proximity to premium universities, transit-oriented locations, and developed business districts.
At Vista Residences, unit owners can take advantage of the property’s centrality. The properties of Vista Residences are strategically located near the country’s premium universities and CBDs, making them an attractive investment for both local and foreign investors.
Vista Residences has ready for occupancy condo projects in Manila such as Vista Taft, Vista Heights, Vista GL Taft, 878 Espana, and Crown Tower University Belt. It also has pre-selling projects in the said area which include Vista Recto, Plumeria Heights, Tennyson Heights, Bradbury Heights, Sky Arts Manila, and Kizuna Heights.
Meanwhile, its ready for occupancy projects in Quezon City including Wil Tower, the Symphony Towers, Pine Crest, and Vista 309 Katipunan. It also has pre-selling condo projects in the said city such as Hawthorne Heights and Vista Pointe.
Living in Vista Residences enables you to enjoy convenience, where everything is pretty much within walking distance or a few minutes away from the property; comfort because the project features and amenities are designed to deliver comfort at all times, which makes condo living a worthy investment; security that is 24/7 and CCTV monitoring, which makes the residents safe and secure within the property.
In line with Vista Residences’ thrust to offer convenience among its residents, it also features an AllDay Convenience Store and Coffee Project in all its projects.
Vista Residences is part of Vista Land’s roster of vertical housing brands that cater to millennials and young professionals. The other vertical brands include Camella Manors, COHO, and Crown Asia.
For more information on Vista Residences, email [email protected], follow @VistaResidencesOfficial on Facebook, Twitter, Instagram, and YouTube, or call the Marketing Office at 0999 886 4262 / 0917 582 5167.
