What Is Commercial Real Estate (CRE)

Property classified as commercial real estate (CRE) is a facility used exclusively for business or as a workspace, rather than as a place to live, which would fall under residential real estate. The most common use of commercial real estate is to generate income through leased properties. From a small storefront to a huge shopping center, this broad category of property can include anything.

Real estate for commercial use encompasses a wide variety of types, including hotels, office space, restaurants, shopping malls, resorts, and hospitals.

Commercial Real Estate: The Basics

Real estate property generally falls into two categories: commercial real estate and residential real estate. Industrial or commercial real estate Daytona Beach properties are not considered residential properties. A commercial property serves as a commercial asset for its landlord, and landlords rent out multi-unit rental properties to tenants, which serve as residences for tenants.

Real estate for commercial purposes can be classified into four categories, depending on its purpose:

1. Dedicated office space
2. Use in the industrial sector
3. Multifamily housing
4. Retail

Further categorization may also be possible within individual categories. Class A, B, and C offices are often grouped together in office space.

• Buildings in Class A represent the best quality of aesthetics, infrastructure quality, and location.
• Classes B buildings tend to be older and more expensive than classes A buildings. These buildings are often renovated by investors.
• Usually older than 20 years, located in less desirable areas, and in need of maintenance, class C buildings are the oldest.

There are some zoning and licensing authorities that break out industrial properties, including those used for manufacturing and manufacturing heavy goods, but for the most part commercial real estate is considered a subset of industrial real estate.

Commercial real estate investments

You can profit from commercial real estate investment and protect yourself against market volatility. Rents are the most important method of generating returns for landlords, though capital appreciation can be profitable when selling a property.