WHAT IS COMMERCIAL REAL ESTATE?
Commercial Real Estate is any non-residential property used for producing income or commercial profit-making purposes. Commercial Real Estate includes retail, hotels, office buildings, apartment buildings, industrial buildings, etc.
Example:
“A company, tenant(lessee) wanted to open up a salon and spa in Indianapolis. The property is owned by a landlord(lessor). Instead of spending capital to purchase a building, a tenant(lessee) can find more benefits by leasing a building from the lessor. The tenant will lease the floor space from the company and pay the monthly rent and other cost depending on the negotiations of any lease. From here on, the tenant(lessee) will have a signed contract for a certain amount of time most likely 3 to 5 years to stay in the real estate with little to no capital to begin her venture. Both parties sign the lease agreement and a new business is established. “
This is a good example of how a smaller commercial real estate transaction can take place in a lessee or lessor's standpoint.
Importance and Economy
According to Real Estate Data story as of 2018, with a total of $543 billion, Commercial Real Estate contributed 3% of total economic input in the US. Commercial Real Estate also provides for a tenant, as you can see the example from above, many investors have place money on real estate as supposed to stocks.
As the world population grows, the demand for real estate increases over time. And since properties are limited resources, investments are guaranteed to appreciate especially for long-term plans. Like any other investment, risk is involved, see your financial advisor or your real estate broker to learn more.
What’s next?
If you’re considering to lease, purchase or invest on a commercial property, then look no further! Durbin Real Estate, a 20-year-old company of over $200 Million Revenue, has streamlined the process of buying and selling commercial properties by making it easier for first time and experienced clients. With industry experts who are made up of caring and knowledgeable professionals who works tirelessly, clients shall receive the best local access and services to commercial, warehouse, retail, industrial building, service providers, property managers, lending professionals, title companies and more. Contact us today to find out how we can be of assistance!