Looking to invest in commercial real estate, but don't know which property type to consider? Here's a comprehensive guide on the five most common types of commercial properties.
1) Multifamily (Apartment Buildings) - Multifamily refers to apartment buildings of all sizes. It is categorized into garden apartments, walk-up apartments, mid-rise apartments, high-rise apartments, and special-purpose housing.
Garden apartments are low-rise apartments with typically less than 3 stories, built in a garden-like setting. Walk-up apartments are 4-6 story apartments without an elevator. Mid-rise apartments are 4-8 story apartments with an elevator. High-rise are 9+ stories with at least one elevator. Special-purpose housing is a multifamily property that targets a population segment, which includes student housing, senior housing, subsidized housing, etc.
Pros of Multifamily Properties:
• Easy to get into with smaller properties and slowly transition to larger properties
• Tax benefits
• Use rents in place for financing
Cons of Multifamily Properties:
• 24/7 tenant management
• Pro-tenant legislation
• Rent control
2) Industrial - Industrial is typically used for producing, manufacturing, or storing products. It includes warehouses, garages, distribution centers, etc. It is oftentimes separated into heavy manufacturing, light assembly, flex warehouse, and bulk warehouse, depending on the size and use of the property.
Heavy manufacturing oftentimes heavily utilizes machinery and usually requires a substantial amount of renovation before renting to another tenant. Light assembly includes storage, product assembly, and office space, which is easier to reconfigure than heavy manufacturing. Flex warehouse normally includes both industrial and office space, making it an easily convertible space. Bulk warehouse are massive properties, typically 50,000-1,000,000 sq ft space, usually used for regional distribution of products.
Pros of Industrial Properties:
• Deal with single tenant
• Long term and stable leases
• Relatively small initial investments
Cons of Industrial Properties:
• Area specialization, making it harder to find new occupier
• Hefty and extensive reconfiguration expenses
• Higher tax rates, depending on area
3) Office Buildings - This category includes single-tenant properties, small professional office buildings, downtown skyscrapers, and everything in between.
Office buildings are either Central Business District (CBD), which is in the middle of a city, or suburban office buildings. There are three categories: Class A, Class B, or Class C, which is determined by the quality of construction and desirability of the location of the office.
Pros of Office Buildings:
• Less turnover
• Longer lease terms
Cons of Office Buildings:
• Less frequency to raise rents
• Emphasis on parking
• Expensive financing options
4) Retail/Restaurant - Retail includes strip centers, community retail centers, power centers, regional malls, and out parcels.
Strip centers are small retail properties that may have an anchor tenant, which is a larger, more well-known tenant that will attract small retail tenants. Community retail centers are between 150,000-350,000 square feet with multiple anchors, usually grocery stores and drug stores. Power centers have several smaller retail stores with a few box retailers such as Wal-Mart, Lowes, Staples, Best Buy, etc. occupying between 30,000-200,000 square feet, containing several out parcels. Regional malls are between 400,000-2,000,000 square feet with a lot of anchor tenants. Out parcel is land set aside for individual tenants such as fast-food restaurants or banks.
Pros of Retail/Restaurant Properties:
• Security and profitability of an Absolute Triple Net (NNN) lease
• Less turnover
• Less tenant management
Cons of Retail/Restaurant Properties:
• Less frequency to raise rents
• Dependent on tenant performance
• Location and foot traffic is extremely important
• Emphasis on parking
• Visual upkeep
5) Land - Land is fairly self-explanatory. It is often categorized as Greenfield land, Infill land, and Brownfield land.
Greenfield lands are underdeveloped land such as farms and pastures. Infill land is vacant land located in cities that have already been developed. Brownfield lands are usually environmentally impaired land that was previously used for other industrial or commercial use. The land is available for re-use.
Pros of Land:
• Tax benefits
• Less expensive
• More rental possibilities (depend on location)
Cons of Land:
• No immediate income from tenants
• Few financing options
• Requires ground-up development
The above are the most common types of commercial property types. There are several others that have not been discussed above such as hotels, funeral homes, nursing homes, theaters, etc, which are special-purpose type properties.
The CBD market offers a lot of opportunities whether you are a business owner, healthcare professional or a common user. The credit goes to the wholesale of CBD. Nowadays, you can sell ready-made CBD products to earn a lot of profit. In fact, this product is one of the fastest selling products in the here and now. Given CBD Products below is what everyone should know about the business opportunities offered by CBD.
Take Advantage Of the Expanding CBD Market
Now is the best time to take your share of the CBD market. The reason is that the sale of these products has been on the rise for the past few years. So, as an innovative business owner, you may want to become a retailer.
This is a billion dollar industry. According to experts, the industry may grow more than 700% by the end of 2020. Therefore, the industry has a good deal of potential for startups as well. All you need to do is get started today.
In the USA, the public is aware of the properties of this oil. The credit goes to the reports published in a lot of newspapers. In fact, thousands of research studies have been conducted to find out the amazing benefits of this product. As a matter of fact, the product is useful for both humans and animals.
Therefore, it's better that you take advantage of the opportunity by starting your own business.
Types of Businesses that Sell CBD
You can sell your products to different types of customers. However, make sure you know that there is enough demand for the types of products you want to sell. Given below is the types of businesses that deal in CBD:
If you are interested in selling your own CBD products, you may consider formulating fresh products. In other words, you can launch your own CBD supplements in the market rather than buy from wholesales. Given below is a line of CBD products, which can give you a better idea of how you should get started.
Long story short, if you are thinking of starting your own CBD oil business, we suggest that you avail this opportunity before it expires. You don't want to be too late.