What is Commercial Real Estate?
Commercial Real Estate is any property owned for the purpose of producing income. There is about $6 trillion worth of commercial real estate in the United States, of which the five largest categories are:
- Retail includes indoor shopping malls, outdoor strip malls, big box retailers, retail and grocery stores and restaurants. Its value is around $2.1 trillion, or represents some 36 percent of the total value of commercial real estate.
- Hotels include motels, luxury resorts and business hotels, whether ‘flagged’ or ‘no-flagged”.
- Office buildings include everything from Manhattan skyscrapers to your lawyer’s office. There are roughly 4 billion square feet of office space, worth around $1.7 trillion, or 29 percent of the total.
- Apartment buildings are commercial real estate. That’s because companies own them only to turn a profit. There are around 33 million square feet of apartment rental space, worth about $1.44 trillion.
- Industrial property generally is used to manufacture, distribute or warehouse a product. There are 13 billion square feet of industrial property worth around $240 billion.
There are other commercial real estate categories are much smaller. These include multi-family, some non-profits, such as hospitals and schools. Vacant land is commercial real estate if it will be leased, not sold.