Common Types of Commercial Leasing Options
Retail and Industrial can both be deemed as “Commercial Real Estate.” Anything that refers to buildings or land sold with the intention to generate profit, industrial and retail are offshoots of commercial real estate.
An industrial property is used for the actual manufacturing of something, and is either some kind of factory or plant. More specifically, you would consider buildings such as warehouses, garages and distribution centers.
Retail properties are commercially zoned solely for business purposes. This means it’s used for the actual selling of the product instead of manufacturing. This would include retail stores, malls, shopping centers and shops all fitting into that mold.
Businesses that occupy commercial spaces typically lease instead of own. An investor usually owns the building and collects rent from all the tenants. There are four types of leases, each requiring different levels of responsibility from owners and tenants.
Single Net Lease
Tenant is responsible for paying rent and property taxes.
Double Net Lease
Tenant is responsible for paying rent, property taxes and insurance.
Triple Net Lease
Tenant is responsible for paying rent, property taxes, insurance and maintenance.
Tenant is responsible only for rent, the landlord pays property taxes, insurance, and maintenance.
If you are interested in commercial real estate, there are a few things to consider before you begin your venture.
Think of what prospective customers and clients will want to see. Think about the potential of the space.
Having exposure to natural light is instrumental in building a positive vibe in your space.
How close is it to other popular retail, offices, public amenities and transportation?
For more than 40 years, retail properties have averaged a 9% return on investment. No matter what form of real estate you’re getting, there are bound to be risks involved, but there is a chance of tremendous growth that can’t be ignored. If you maneuver with great attention to detail, you’ll have a great chance to succeed.