Once you’ve decided to invest in commercial real estate, you may need to consider the type of property that is right for you, as each comes with certain upsides as well as unique challenges.
Office Space. Whether it’s a high-rise in the city or a business park in the suburbs, office buildings can be home to multiple tenants or rented to one tenant with larger needs. Many office buildings are build-to-suit and all will be categorized into Class A, B or C. The below definitions of each are provided by The Building Owners and Managers Association International (BOMA):
Class A. Most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high-quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
Class B. Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area. Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price.
Class C. Buildings competing for tenants requiring functional space at rents below the average for the area.
Retail Space. Retail properties are the buildings that house restaurants and shops. They can vary drastically in size ranging from a space large enough for a major big-box retailer to small spaces for local boutiques.
Industrial. The Lowcountry is seeing much more industrial space and we have a past post all about investing in this growing market: Should You Invest In Industrial Space in the Lowcountry? Industrial commercial properties are usually located further away from busiest parts of the city but are still convenient for employees and business operations. Industrial facilities can house operations for many types of tenants and include space for manufacturing, warehouse, assembly, and more.
Multi-family Housing. This segment of commercial real estate includes all types of residential real estate that is not single-family homes including apartments, condos, and townhomes. Similar to office buildings, many multifamily properties are also classified into Class A, B or C.