Commercial property

Commercial property

The term commercial property (also called investment or income property) refers to buildings or land intended to generate a profit, either from capital gain or rental income.[1]

Definition

Commercial property includes office buildings, industrial property, medical centers, hotels, malls, retail stores, shopping centers, farm land, multifamily housing buildings, warehouses, and garages. In many states, residential property containing more than a certain number of units qualifies as commercial property for borrowing and tax purposes.

Commercial real estate is commonly divided into four categories:

Categories of Commercial Real Estate
Category Examples
Retail medical centers, hotels, malls, retail stores, shopping centers, public houses[2]
Office office buildings
Industrial industrial property, office/warehouses, garages, distribution centers
Multifamily (apartments) multifamily housing buildings

Of these, only the first three are classified as being commercial buildings. Residential Income Property may also be used to mean Multifamily Apartments.

The total value of commercial property in the United States was approximately $11 trillion in 2009, as measured by the CoStar Group and published in the Journal of Real Estate Management.[3]

According to Real Capital Analytics, a New York real estate research firm, more than $160 billion of commercial properties in the U.S. are now in default, foreclosure or bankruptcy. In Europe, approximately half of the €960 billion of debt backed by European commercial real estate is expected to require refinancing in the next three years, according to PropertyMall, a UK based commercial property news provider.[4]

See also

References

  1. ^ Investopedia Definition
  2. ^ "Commercial Property Investment Agency: Types of property". http://www.commercialpropertyinvestmentagency.com/index-3.php. Retrieved 2010-07-24. 
  3. ^ Florance, Andrew. "Slicing, Dicing, and Scoping the Size of the". Journal of Real Estate Management. http://www.costar.com/webimages/PressRelease/2011/Size%20of%20CRE%20Market%20Florance%20et%20al%20JREPM%20v16%20n2.pdf. Retrieved 8/18/2011. 
  4. ^ PropertyMall http://www.propertymall.com/press/article/24545

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