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What makes commercial real estate different?

How is Commercial Real Estate Different?

The primary difference between commercial real estate and residential real estate is the purpose for which these properties or buildings are used. Commercial real estate is, unsurprisingly, used for commerce. What this means is that if you are to operate a business of any kind, be it a gas station or a retail store, the property used for this will fall under the category of commercial real estate.

There are, however, plenty of other ways in which commercial real estate is different from other types of real estate including residential and industrial.

Complexity

Most people find the jargon and intricacies in commercial real estate to be more complex than residential real estate. A commercial real estate agent, for instance, generally deals with a more corporate environment which makes their jobs a notch more complicated and visibly less casual than it is for residential real estate agents.

Capital

The capital generated for residential real estate may be from individual investors, hard money lenders or money accumulated using traditional financing. In commercial real estate, however, the access to capital is increased by the involvement of investment groups, REITs and private equity firms.

Market
The major difference between the markets of residential and commercial real estate is that the value of a commercial property is directly proportional to the revenue generated by it. In the case of residential properties, however, there isn’t much variation possible in the property value when compared with the market standards.

An ideal commercial property is one where business can flourish. For this, it is important that the location must be safe and have immense potential for growth. The Riverbend Gates Plaza, in London, Ontario, is one such commercial real estate property available for lease. Not only is it located in one of the fastest growing areas of London, but it also guaranteed to provide great return on investment.

To learn more about commercial real estate and Riverbend Gates Plaza, visit Plaza Brokers.