The 6 Types of Commercial Properties


There are several different types of commercial properties. With the evolution of time and the requirements of the humans and their businesses, there have been new categories and segments that have evolved within the commercial real estate industry. We look at some of the most common types of commercial properties:

1 Office Buildings: This is one of the most common types of commercial properties and can be found in tier 1, tier 2 or even tier 3 cities. In tier 1 cities, offices can be in skyscrapers and other tall buildings. The office buildings can be single-tenanted or multi-tenanted. There are grades attached to office buildings- Grade A, Grade B and Grade C. While Grade A buildings are the best kept buildings at prime places and command the highest rentals, Grade B buildings are slightly older, offer fewer facilities and have more affordable rents. Grade C buildings are the oldest buildings in any city and have very few facilities and upkeep. They have the lowest rentals.

2 Industrial Properties: Industrial properties are usually located outside city areas and are larger in size. They can be new or really old and rarely have alternative usage. Here again there can be several sub segments like factories, units for assembling machinery parts, different types of warehouses or even a research and development facility. An industrial property is usually occupied by the owner of the property. However, they are times when they are let out to tenants. Sometimes a permit may be required to carry out business activity from an industrial property.

3 Retail Properties: There are several retail properties and they can be found in urban and surban locations and can be of several different types. They can be formal retail format like a mall or just a clutch of shops or even shacks. While the formal types will have some of the basic safety features like fire fighting and evacuation systems, the others like a small market or clutch of shops may not have anything like that.

Retail commercial properties can be quite complex with elements of formal and informal structure and can be single tenanted or multi-tenanted.

4 Residential Properties Let Out for Commercial Purpose: There are times when an apartment or a residential building is let out for commercial purpose like in case of serviced apartments.  There are other examples like condos or condominiums. These properties have especially become popular since the time of globalisation. MNCs and expats are the largest occupiers of these properties and the management of such properties is often done by a large professional company which may take a commission from the owner for running the show.

5 Hospitality Properties: There are hotels, resorts, motels and other forms of properties that are meant for short stays, usually for travellers. They can be part of a large chain like a hotel chain or even individually owned and managed. There are boutique type of hotels and resorts which also fall under this category and usually provide concierge, food, communication and other facilities for the comfort of the customers.

6 Speciality Properties: There are commercial properties that do not fall into any of the above categories like amusement parks, bowling alleys, skating rinks and others. These are the newest addition to the list of commercial properties from historical point of view.

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