Is Office Space Considered Commercial?

Commercial real-estate is categorised into four different sections, depending on the function. These include office space, industrial use, multi family rental, and retail. I got to know these from my brother-in-law who is in the real-estate industry. So, the answer to your question, is office space considered commercial, is yes, and he further told me that office space has subtypes which are categorised as class A, class B, and class C. Let me break it down for you. 

What is Commercial Real-Estate?

Commercial real-estate is in fact a property that’s used for business purposes, or in simple terms, these properties are used to provide a workspace, which is different from residential properties, designed specifically for living purposes. Some of the important categories of commercial real estate are

• Retail and office space

• Hotels and resorts

• Healthcare facilities

• Shopping malls

• Restaurants 

The important thing about these commercial real estate businesses involves the construction, marketing, management, and leasing of spaces for business purposes. The subtypes of office structures, as I mentioned above, include three categories. 

• Class A - These kinds of buildings are considered the best in terms of quality, age, aesthetics, infrastructure, and location. 

• Class B - I learned that these buildings are older, and not as competitive as class A buildings. 

• Class C - Lastly, these buildings are the oldest, and usually more than 20 years old. The buildings are located in secluded areas, and are in dire need of maintenance.

So, I also learned that one of the biggest advantages of commercial real estate is that their investment rates are lower and thus, it yields higher benefits. For example, in some areas where new construction is limited by unavailability of land or some restrictive laws against development, these spaces can give excellent returns and monthly cash flows as well.

I hope this was helpful.