Commercial Real Estate Examples

Reonomy’s definition of commercial real estate is anything larger than a single-family home.

So, anything from a duplex, all the way up to the largest buildings in the country.

While official classifications can vary from county to county, generally, commercial real estate can be broken down into eight major categories.

We’ll explore different building types, property and land use types, and skim through some examples of each asset class along the way.

Click here if you’re looking to read up on the different property class levels in CRE.

1. Multifamily

Multifamily properties are the go-between for residential and commercial real estate.

While they can serve primarily as a residency, the general purpose for the property type is for investment (owner-occupied or not).

The multifamily asset class includes everything from a duplex up through a multi-hundred unit apartment building.

Duplex/Triplex/Quadruplex

Duplexes are two-unit rental properties, triplexes are three-unit properties, and quadruplex, four units. Pretty straightforward.

The “plex” suffixed property types are found in virtually every market, but are more for beginning investors and those that would like to make a profit on their own residence (by renting out other units).

Apartment buildings, on the other hand, are typically distinguished as being low, mid, or high rise based on the amount of stories they have.

Garden Apartments

Suburban garden apartments started popping up in the 1960s and 1970s, as young people moved from urban centers to the suburbs.

Garden Apartment Building

Garden apartments are typically 3-4 stories with 50-400 units, no elevators, and surface parking.

Essentially, it is a collection of low-rise apartment buildings on one piece of property, those of which may share yard or other land space.

Mid-Rise Apartments

These properties are usually 5-12 stories, with between 30-110 units, and elevator service. These are often constructed in urban infill locations.

High-Rise Apartments

High-rise apartments are found in larger markets, usually have 100+ units, and are professionally managed.

The number of stories is less explicit for high-rise buildings, but typically once you exceed 10-12 stories, most markets will consider the building as a high-rise.

Once a high-rise building exceeds 40 stories and meets a certain height, it’s generally considered a skyscraper.

2. Office

Like multifamily properties, office buildings are also designated to low, mid, and high rise based on their size.

Office Building

Class A, B, and C Office Buildings

Office buildings are usually loosely grouped into one of three categories: Class AClass B, or Class C.

These classifications are all relative and largely depend on context—i.e. the location of the building and health of its surrounding market.

Class A buildings are considered the best of the best in terms of construction and location.

Class B properties might have high-quality construction, but with a less desirable location.

Class C are those that might be fairly dilapidated and in an unfavorable location.

Central Business District (CBD)

Office buildings located in a central business district (CBD) are those that are in the heart of a city.

In larger cities like Chicago or New York, and in some medium sized-cities like Orlando or Jacksonville, these buildings would include high rises found in downtown areas.

Suburban Office Buildings

This classification of suburban office space generally includes mid-rise structures of 80,000-400,000 square feet located outside of a city center.

Cities will also often have suburban office parks which assemble several different mid-rise buildings into a campus-like setting.

3. Industrial

Industrial properties can also vary quite a bit in size, depending on their specific use-cases.

Industrial Real Estate

Heavy Manufacturing

This category of industrial property is really a special use category that most large manufacturers would fall under.

These types of properties are heavily customized with machinery for the end user, and usually require substantial renovation to re-purpose for another tenant.

Light Assembly

These structures are much simpler than heavy manufacturing properties, and usually can be easily reconfigured.

Typical uses include storage, product assembly, and office space.

Flex Warehouse

Flex space is an industrial property that can be easily converted and normally includes a mix of both industrial and office space.

Flex space can also be considered mixed-use, which we’ll discuss in more detail below.

Bulk Warehouse

These properties are very large, normally in the range of 50,000-1,000,000 square feet.

Often these properties are used for regional distribution of products and require easy access by trucks entering and exiting highway systems.

4. Retail

Retail Property

Strip / Shopping Center

Strip centers are smaller retail properties that may or may not contain anchor tenants.

An anchor tenant is simply a larger retail tenant which usually serves to draw customers into the property.

Examples of anchor tenants are Wal-MartPublix, or Home Depot.

Strip centers typical contain a mix of small retail stores like Chinese restaurantsdry cleanersnail salons, and so on.

Community Retail Center

Community retail centers are normally in the range of 150,000-350,000 square feet.

Multiple anchors occupy community centers, such as grocery stores and drug stores. Additionally, it is common to find one or more restaurants located in a community retail center.

Power Center

A power center generally has several smaller, inline retail stores, but is distinguished by the presence of a few major box retailers, such as Wal-MartLowesStaplesBest Buy, etc.

Each big box retailer usually occupies between 30,000-200,000 square feet, and these retail centers typically contain several out parcels (see below).

Regional Mall

Malls range from 400,000-2,000,000 square feet and generally have a handful of anchor tenants such as department stores or big box retailers like Barnes & Noble or Best Buy.

Out Parcel

Most larger retail centers contain one or more out parcels, which are parcels of land set aside for individual tenants such as fast-food restaurants or banks.

5. Hotels

Full Service Hotels

Full service hotels are usually located in central business districts or tourist areas and include the big-name flags like Four SeasonsMarriott, or Ritz Carlton.

Limited Service Hotels

Hotels in the limited service category are usually boutique properties.

These hotels are smaller and don’t normally provide amenities such as room service, on-site restaurants, or convention space.

Extended Stay Hotels

These hotels have larger rooms, small kitchens, and are designed for people staying a week or more.

6. Mixed Use

Mixed-Use Real Estate

Mixed use properties, while their own distinction, can actual be a combination of any of the aforementioned types of commercial property.

The most common form of mixed-use properties, especially in cities, are retail/restaurant properties with offices or residences sitting atop.

Think of your general downtown high-rise building, and there’s a good chance that the asset is considered mixed-use.

Typically, mixed-use properties are some combination of office, residential/multifamily, retail, and/or industrial.

7. Land

Greenfield /Agricultural Land

Greenfield land refers to undeveloped land such as a farm or pasture.

Within this bucket would be different types of agricultural land as well, like orchards, animal farms, ranches, and more.

Infill Land

Infill land is located in a city that has already been developed but is now vacant. Infill is strictly associated with the development of real estate in urban locations.

Brownfield Land

Brownfields are parcels of land previously used for industrial or commercial purposes but are now available for re-use.

These properties are generally environmentally impaired, or at the least, are suspected of being so due to previous commercial uses.

8. Special-Purpose

The above categories of real estate cover the major types of commercial real estate.

However, there are plenty of other types of real estate that would be considered commercial, that investors construct and own.

That’s where the idea of “special purpose” property comes into play. It is more or less the miscellaneous classification of CRE.

Examples of special purpose properties include amusement parks, bowling alleys, parking lots, stadiums, theaters, zoos, and much, much more.

While there is quite a bit more that CRE professionals need to learn with regards to each asset type over time, having a general understanding of the different types of commercial real estate is a great place to start.

Different Types Of Commercial Property Explained

Whether it be a house or flat, everyone knows how much Brits love property. As a result, it is no surprise that this love of property has transferred to commercial property over the years, so it is no wonder it’s becoming increasingly popular to invest today. But how do you know which type of commercial property is right for you and your business? Here at Savoy Stewart, our expert team can help you to find a commercial property type that is ideal for your business. Read on to find out about the different types of commercial property.

What are the different types of commercial property?

What is a commercial building and how is it classified? You may not be aware that each type of building in the commercial property market is made up of five main categories, where each use of these buildings vary.

These five categories include:

  • Offices
  • Retail – retail stores, shopping centres, shops
  • Industrial – warehouses, factories
  • Leisure – hotels, pubs, restaurants, cafes, sport facilities
  • Healthcare – medical centres, hospitals, nursing homes

 Photo credit: Tony Baggett / Shutterstock

What are the commercial property classifications?

The different types of commercial buildings are divided into classes under the Town and Country Planning (Uses Classes) Order of 1987, which determines how each of the commercial property types should be occupied. Each type of commercial building has their use defined by their local authority, known as “use classes”, and any business carried out in the commercial building must be in line with its planning use, otherwise you may be fined.

If you aim to renovate the building or alter its intended use, you may require planning permission from your local planning authority (LPA).

For example, a property with A3 usage can be used for “the sale of food or drink for consumption on the premises or of hot food for consumption off the premises”.

This property classification system can help in two significant ways:

  1. The planners for an area can ensure that an area doesn’t include specific property types to reduce the number of complaints – for instance, no pubs.
  2. It identifies what type of business they are allowed to move into the premises.

What are the commercial property use classes found in the UK?

 Photo credit: Alastair Wallace / Shutterstock

A1 – Shops

The are allowed for use for all or any of the following purposes:

  • for the retail sale of goods other than hot food
  • as a post office
  • for the sale of tickets or as a travel agency
  • for the sale of sandwiches or other cold food for consumption off the premises
  • for hairdressing
  • for the direction of funerals
  • for the display of goods for sale
  • for the hiring out of domestic or personal goods or articles
  • for the reception of goods to be washed, cleaned or repaired

A2 – Financial and Professional Services

Use for:

  • financial services (e.g. banks)
  • professional services (other than health or medical services)
  • any other services (including use as a betting office) which it is appropriate to provide in a shopping area

A3 – Food and Drink

For the sale of food and drink for consumption on the premises:

  • restaurants, snack bars, cafés, shops for sale of hot food

A4 – Drinking Establishments

Buildings where the primary purpose is the sale and consumption of alcoholic drinks on the premises:

  • public houses (pubs), wine bars

 Photo credit: Bikeworldtravel / Shutterstock

A5 – Hot Food Take-away

Premises where the primary purpose is the sale of hot food for consumption off the premises.

B1 – Business

For all or any of the following purposes:

  • offices not classified within A2
  • for research and development studios
  • for any industrial process (e.g. laboratories or high-tech industries)

B2 – General Industrial

General industrial use for the carrying on of an industrial process other than one falling within class B1, or within classes B3 to B7.

B8 – Storage and Distribution

Use for:

  • wholesale warehouse, distribution centres, repositories

 Photo credit: Graphical_Bank / Shutterstock

C1 – Hotels

Use as a:

  • hotel, boarding or guest house

C2 – Residential Institutions

Use for:

  • boarding schools, residential colleges and training centres
  • residential care homes, hospitals, nursing homes

C3 – Dwelling Houses

This is formed of 3 parts:

  • use by a single person or a family (a couple whether married or not, a person related to one another with members of the family of one of the couple to be treated as members of the family of the other), an employer and certain domestic employees (such as an au pair, nanny, nurse, governess, servant, chauffeur, gardener, secretary and personal assistant), a carer and the person receiving the care and a foster parent and foster child.
  • up to six people living together as a single household and receiving care e.g. supported housing schemes such as those for people with learning disabilities or mental health problems.
  • groups of people (up to six) living together as a single household. This allows for those groupings that do not fall within the C4 HMO definition, but which fell within the previous C3 use class, to be provided for i.e. a small religious community may fall into this section as could a homeowner who is living with a lodger.

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