Types of USA Commercial Investment Properties

Commercial real estate is commonly divided into six categories:

1. Office Buildings – This category includes single‐tenant properties, small professional office buildings, downtown skyscrapers, and everything in between.

2. Industrial – This category ranges from smaller properties, often called “Flex” or “R&D” properties, to larger office service or office warehouse properties to the very large “big box” industrial properties. An important, defining characteristic of industrial space is Clear Height. Clear height is the actual height, to the bottom of the steel girders in the interior of the building. This might be 14‐16 feet for smaller properties, and 40+ feet for larger properties. We also consider the type and number of docks that the property has. These can be Grade Level, where the parking lot and the warehouse floor are on the same level, to Semi‐dock height at 24 inches, which is the height of a pickup truck or delivery truck, or a Full‐dock at 48 inches which is semi‐truck height. Some buildings may even have a Rail Spur for train cars to load and unload.

3. Retail / Restaurant – This category includes pad sites on highway frontages, single tenant retail buildings, small neighbourhood shopping centres, larger centres with grocery store anchor tenants, “power centres” with large anchor stores such as Best Buy, PetSmart, OfficeMax, and so on even regional and outlet malls.

4. Multifamily– This category includes apartment complexes or high‐rise apartment buildings. Generally, a fourplex or more is considered commercial real estate.

5. Land – This category includes investment properties on undeveloped, raw, rural land in the path of future development. Or, infill land with an urban area, pad sites, and more.

6. Miscellaneous – This catch all category would include any other non-residential properties such as hotel, hospitality, medical, and self‐storage developments, as well as many more. 

Categories of Commercial Real Estate

Leisure :   hotels, public houses, restaurants, cafes, sports facilities

Retail :  retail stores, shopping malls, shops

Office :  office buildings, serviced offices

Industrial :  industrial property, office/warehouses, garages, distribution centres

Healthcare :  medical centres, hospitals, nursing homes

Multifamily (apartments) : multifamily housing buildings

Of these, only the first five are classified as being commercial buildings. Residential income property may also signify multifamily apartments.

Building Classes : Grading

Building Owners and Managers Association (BOMA) classifies office space into three categories: Class A, Class B and Class C.

Class A office buildings  have the "most prestigious buildings competing for premier office users with rents above average for the area. Class A facilities have "high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence." 

Class B office buildings as those that compete "for a wide range of users with rents in the average range for the area. Class B buildings have "adequate systems" and finishes that "are fair to good for the area," but these buildings do not compete with Class A buildings for the same prices. 

Class C buildings are aimed towards "tenants requiring functional space at rents below the average for the area”.