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Commercial real estate is a term that encompasses many different types of property and buildings. It can be anything from retail stores to apartment complexes to office space.

Businesses or individuals often lease commercial properties for use as their place of business or residence. These investments can be quite lucrative for those who are willing to invest in the right commercial property. Let’s break down the primary types of commercial real estate to learn which may be right for your portfolio.

1. Multi-Family Property

Multi-family properties are buildings that contain more than one unit or apartment. These can be rented out to families, similar to single-family homes, but they often have common areas. Because these units usually share many amenities and features, multi-family properties tend to rent for cheaper than other commercial property types.

2. Office Buildings

Office buildings are designed for a business to operate in. These properties usually contain multiple offices, conference rooms, lobbies, and break rooms. Office buildings can be built from the ground up or converted structures that were previously used for something else.

3. Industrial Property

Industrial properties are used for non-retail purposes. These spaces are usually reserved for manufacturing, but they can also be used for food storage or distribution, among other things. Industrial property is often substantial in size and they contain different types of buildings called bays.

4. Retail Property

Retail property includes stores, boutiques, restaurants, and cafes. These properties are open to the public, and they can be either attached to another building or free-standing on their own. The majority of retail property is leased for a long-term period of time by the owner.

5. Hospitality Property

Hospitality properties include hotels, resorts, and vacation rental homes. Unlike retail space, hospitality property is often rented out by the room or unit. This type of commercial property can be very profitable due to its high price per square foot and the lengthy amount of time that it stays rented out.

By learning each type of property, you can begin to assess which ones are the best investment for your portfolio. Your broker can help you find properties that meet these criteria, ensuring that you pick the perfect investment.