Business

The difference between industrial, retail and commercial real estate

Before answering this question, it may be helpful to first define each term.

Both the retail and industrial sectors are considered “commercial real estate” (as opposed to “residential real estate”). Commercial real estate refers to buildings or land intended to generate profits; industrial and retail are simply subcategories of commercial real estate.

First of all, an industrial property is defined as a property used for the actual manufacture of something and can be considered a factory or a plant. It is generally zoned for light, medium, or heavy industry. This includes things like warehouses, garages, and distribution centers, etc.

Retail property is commercially zoned property that is used solely for business purposes, the actual sale of the product, rather than its manufacture – retail stores, shopping malls, shopping malls, and stores that are nicely packed under the retail umbrella.

Generally, businesses occupying commercial real estate often rent the space. Typically, an investor owns the building and collects rent from each business that operates there.

There are four main types of commercial real estate leases, each of which requires different levels of responsibility on the part of the owner and the tenant.

Single net lease – The tenant is responsible for paying rent and property taxes.

Double net lease – The tenant is responsible for paying the rent, property taxes, and insurance.

Triple net lease – The tenant is responsible for paying rent, property taxes, insurance, and maintenance.

Gross lease – the tenant is only responsible for the rent; the landlord pays property taxes, insurance, and maintenance.

If you are considering owning commercial property, there are a few things you would do well to keep in mind:

1) Attractive Appearance – The last thing you need is a vacant commercial property in Sydney for any length of time. Think about how prospective tenants think: what its customers want to see?

2) Aesthetic entrance: first impressions count, simple, simple things. This is a great tool to put your prospects in a great mood … and your clients.

3) Natural light – especially in demand today

4) Location: close to other offices, public services, transportation, etc.

Since 1980, commercial property has averaged 9% yield, although it is currently yielding around 6%. Industrial real estate tends to be the most volatile and is currently yielding around 7% (compared to its peak of around 12% during the recession of the 1990s).

And obviously, no matter what type of commercial property you are considering, read the lease carefully. It seems silly to say it, but you would be very surprised at problems that can turn into problems simply because things were not read correctly.

Leave a Reply

Your email address will not be published. Required fields are marked *