Commercial real estate (CRE) refers to properties that are used exclusively for business purposes or to provide a workspace rather than as a living space. This category encompasses a variety of property types, including office buildings, retail spaces, warehouses, industrial properties, and multi-family residential buildings that are typically owned for investment income.
Commercial real estate is often distinguished from residential real estate, as it is primarily aimed at generating profit through leasing space or selling the property. Investors in commercial real estate may engage in activities such as acquiring properties, managing tenants, and executing leases. The value of commercial real estate is typically determined by factors like location, market demand, income potential, and the physical characteristics of the property.
Investments in commercial real estate can provide various benefits, including cash flow from rental income, value appreciation, and tax advantages. The market for commercial real estate can be affected by economic conditions, including interest rates and employment rates, making it a sector of significant interest for investors, businesses, and urban planners.