3 Types of Commercial Real Estate Investment Purchases

3 Types of Commercial Real Estate Investment Purchases

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Commercial real estate investors have a plethora of properties they can choose to obtain. Experts, like Paul Daneshrad, know all about the various kinds of buildings that can be bought and rented out. Buyers must be aware of the features associated with each kind of purchase. Here are three types of commercial real estate investment properties.

1. Office

Investors can purchase office buildings in suburban areas or in urban ones. Suburban buildings usually have much fewer stories than the ones found in urban regions. Some investors prefer to acquire property that they rent out to one tenant while others like to have multiple tenants per property. Office building classifications are as follows: Class A, B, and C. Class A properties rank extremely high in terms of quality; thus, individuals have to pay rent that is above average to reside in these spaces. Class B properties are average in regard to quality, so tenants pay rent that is considered average for the region. Class C properties are tolerable but not of high-quality; rent for these properties is usually below average.

2. Industrial

Industrial structures are typically huge or have very specialized features. Many investors will acquire bulk warehouses to house tenants whose job it is to store and distribute large amounts of items. Some investors focus on manufacturing plants. Such buildings come equipped with special tools and machinery that tenants utilize to generate certain products. There are industrial spaces called light manufacturing buildings; tenants will construct products in these spaces but will not require as much equipment as heavy manufacturing buildings. It is worth mentioning that some industrial properties contain a mixture of office and manufacturing areas. Real estate investors can decide how to advertise and rent out these properties.

3. Hotel

There are many buildings that fall under the hotel category. Budget, deluxe, boutique, and luxury hotels can be purchased by investors as well as motels, casinos, and resorts. When looking at buildings, investors need to consider if their prospective tenants will need a certain number of rooms, fully equipped kitchens, and on-site restaurants. They will also have to think about whether they want their tenants to maintain recreational facilities such as large pools, golf courses, and small amusement parks.

It is up to investors to determine whether they want to focus on one sort of commercial property or dabble in several. Each type of purchase has its own set of legal and financial considerations.

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