Choosing the right type of commercial real estate investment can be one of the most taxing tasks for any investor. There are different types of commercial real estate investments, and as an investor, you must know your options, weigh their pros and cons before you make your choice. In this article, we will discuss the various types of commercial real estate investment present in the market that is one of the most rapidly growing ones in the field of real estate.
Real estate is any land that includes any permanent or long-term and natural or manmade improvements on it, including buildings, minerals, crops, bridges, fences, and more. Real estate is a type of real property with a tangible nature. Real estate is a strong asset, which also makes it the safest kind of investment.
It is different from other investments that are not attached to the land, like, jewellery, vehicles, furniture, machinery, and more. Before we discuss commercial real estate and the different types of commercial real estate investment, let us take a quick look at the types of real estate.
There are four main categories of real estate. They are:
Land is the foundation of all real estate properties. Real estate investors usually invest in plain land and combine it with improvements (properties) so that they can increase the value. This type of real estate is usually available in the city’s suburbs and outskirts and is cheaper than other real estate types.
2. Residential Real Estate
Residential real estate is that kind of real estate that revolves around providing housing for individuals, families, or groups of people. Residential real estate has a high demand and is the most popular real estate type, with a vast customer base. Single-family homes, individual houses, apartments, condos, and more are a few examples of residential real estate.
3. Commercial Real Estate
Commercial real estate is any real estate that is used to generate income. It is any land or building used for commercial purposes, i.e., to set up shops, office spaces, and run businesses. It is the second most popular real estate after residential real estate. Multi-family dwellings, office spaces, retail and wholesale shops, hospitality spaces, and more come under commercial real estate. The commercial real estate market is a rapidly growing one, and we will discuss the types of commercial real estate investment later in this article.
4. Industrial Real Estate
Industrial real estate includes spaces used to carry out industrial activities, including production and manufacturing products for businesses. These spaces are usually located in the city’s outskirts and are large as they have to accommodate heavy machinery. Industrial spaces are used for factories, research and development, construction, mechanical productions, warehousing, power plants, and more.
These are the four main categories of real estate. We will now discuss commercial real estate and the different types of commercial real estate investments.
Commercial real estate investment
Commercial real estate is any real estate that is solely used to generate income. This type of real estate is used for commercial purposes, including setting up shops or offices to aid entrepreneurs in running their businesses. Commercial real estate is second on the list of the most sought-after real estate, right after residential real estate.
Everyone needs housing, but not everyone requires a commercial space. This is why residential real estate tops the list of the most popular type of real estate. However, commercial real estate offers more to investors than residential real estate from an investment point of view. There are many types of commercial real estate investment that you, as an investor, can consider putting your bets on.
The commercial real estate market is seeing rapid growth, with more and more investors moving towards investing in commercial spaces and seeing good profits. Let us discuss the different types of commercial real estate investment available for investors in the market.
Different types of commercial real estate investments
The commercial real estate market is vast and offers various options that investors can contemplate and choose to invest in. The following are the different types of commercial real estate investments:
1. Office Spaces
Office Spaces are that type of commercial real estate investment that houses offices for businesses to function smoothly. Demand for office spaces is always high. Especially if you can invest in an office space in the right location, you will never run out of tenants, no matter the market condition. Office spaces can be further divided into –
- Central Business District
- Commercially Zoned Homes
- Medical Office
- Suburban Office Buildings
2. Multi-family Dwellings
Multi-family dwellings are nothing but residential spaces with more than one unit. This type of commercial real estate investment has a high potential to yield returns. Multi-family dwellings have the scope to house multiple tenants in one single building, which will increase your rental income in return.
Even if you lose one tenant, your income won’t take a big hit as your other tenants would still keep the money flowing! Multi-family is one of the most giving types of commercial real estate investments. They are further classified into:
- Mid-rise Apartments
- Garden Apartments
- High-rise Apartments
- Students Housing
- Senior/Assisted Living
3. Industrial Spaces
While industrial, like residential real estate, is a classification of the umbrella term that is real estate, it can also count as commercial real estate, as they are leased out and provide a source of income for industrial real estate owners.
Industrial spaces are that type of commercial real estate investment used for businesses from the product industry for manufacturing and production purposes. These spaces generally accommodate heavy machinery, are large in area, and are located in the city’s outskirts.
Industrial spaces are further divided into:
- Bulk Warehouse
- Heavy Manufacturing
- Flex Warehouse
- Light Assembly
- Refrigeration Unit/Cold Storage
- Industrial Showroom
4. Retail Spaces
Retail real estate is a type of commercial real estate investment that houses any business that sells products and services directly to customers. Simply put, retail spaces are occupied by B2C business owners and are used to set up shops mainly. This type of commercial real estate investment includes shopping centres, restaurants, and more.
Retail spaces also include:
- Regional Mall
- Neighbourhood Shopping Centre
- Community Retail Centre
- Power Centre
Hospitality is a very popular type of commercial real estate investment. It is also substantially expensive for the amount of work the investor needs to undertake to make the space hospitable.
They serve travellers by providing them with a place to stay, along with food and recreational activities. They can be used for both business and to unwind. They are further classified into:
- Budget Hotels
- Limited-Service Hotels
- Full-Service Hotels
- Extended Stay Hotels
- Short-Term Rentals
These are the most popular types of commercial real estate investments that you, as an investor, can consider investing in. Commercial real estate investment has its own benefits, including assured steady cash flow, building substantial equity and leveraging the same, and excellent appreciation value, apart from being one of the most secure investments.
You can consult a real estate agent before going in for one of the types of commercial real estate investment mentioned in this article.
If you are actively looking to invest in commercial real estate in Chennai, the Market of India is a great place to consider! Read on for more information about the Market of India and how it is beneficial for traders and entrepreneurs.
How Market of India is beneficial for traders
Market of India, located within SPR City, Chennai, is India’s largest wholesale and retail market. It brings under one roof all the significant markets in Chennai, ensuring a seamless and more straightforward trade process.
At Market of India, we offer different types of commercial real estate investments for you to choose from. From wholesale shops, retail shops to office spaces, Market of India is the first-of-its-kind centralised trading hub in the city.
Here’s how the Market of India is beneficial for traders:
1. A massive audit we conducted revealed that upon completion, we can expect around 40 lakh footfalls every month, which is access to 40 lakh prospective customers for your business, in a month.
2. At Market of India, we help take your business beyond the borders of physical trade. We have a built-up online marketplace with a listing of over 1,00,000 products and commodities. This will help you take your business to the right and a broader target audience in a shorter span of time.
3. At Market of India, we not only provide you with a space to conduct your trade, but we also offer 100% marketing support. With 20+ ancillaries, we help you see steady growth in your business.
4. With a total built-up area of 54,00,000+ sq. ft., comprising 9+ markets, 5000+ shops, located across a trade corridor that is 18 kilometers long, Market of India is the first-of-its-kind organised market in Chennai. It also houses a Central Plaza of 1,00,000+ sq. ft., and an Atrium of 28,000+ sq. ft.!
5. Market of India offers you endless opportunities to work with traders from across the world, thereby opening doors to network, gain contacts in the international trade arena, and build a solid foundation for your business to go global.
6. Market of India offers various commercial real estate investments, including wholesale, commercial, retail, and office spaces for sale in Chennai.
7. Market of India offers commercial spaces with state-of-the-art amenities like advanced security features, a food court, 24 access points, and more.
If you are a commercial real estate investor, let us know your thoughts on the commercial real estate market and investment in the comments below!