A lucrative option for skilled investors
Investing in commercial real estate can be a bit more complicated; there are many asset classes of commercial real estate, each with their own pros and cons.
Some residential investors shy away from investing in commercial real estate because they’re concerned about factors such as larger purchase prices or complicated and lengthy closings.
However, in reality, if you have the right network and training, you can capitalize on payouts that are very often much larger and enjoy a very attractive professional purchase environment that’s more predictable than residential.
The main types of commercial real estate include:
Examples of multi-family real estate include:
- apartment complexes
- high-rise condominium units
- duplexes, four-plexes, etc.
Examples of retail commercial real estate include:
- strip malls
- retail centers
These properties are often situated in urban locations and range in size from 5,000 to as much as 350,000 square feet.
This type of commercial real estate is typically further broken down into three categories:
- Class A
Class A commercial property would be office space that is either extensively renovated or newly built. It can be a single-tenant office or a skyscraper...it’s the condition of the building that determines its classification.
- Class B
Class B commercial real estate properties tend to be older buildings that are well-maintained but in need of minor repairs and/or updating. These types of properties are very popular with commercial real estate investors because they require less capital and time to start giving a good return.
- Class C
Class C commercial real estate properties are often the target of redevelopment. Higher vacancy rates, out of date infrastructure and poor placement make these commercial properties more capital intensive than other options.
Industrial commercial real estate is usually geared towards manufacturers, offering them spaces with height specifications and the ability to unload freight via docks for trucks and/or rail.
Examples of commercial real estate properties that can be designated as “special use” include:
- car washes
- self-storage units
- sports stadiums
- amusement parks
- mixed-use development (a mix of residential and commercial use spaces within the same complex)
If you’d like to know more about investing in commercial property in Dallas we have the experience and the knowledge to help you learn and profit from commercial real estate investing.