Las Vegas Commercial Real Estate is anything that houses a business for profit. This can include warehouses, office buildings, shopping centers and more.
Some investors buy direct commercial property, while others purchase shares in real estate investment trusts (REITs) or exchange-traded funds that invest in the sector. All of these investments provide reliable rental income.
Commercial space is any non-residential property that is used for business activities, including offices, warehouses, retail spaces and more. Office spaces can be either owned or leased, and they can range in size from small to large. Office spaces are often occupied by companies that specialize in professional services, such as law firms or accounting firms.
Class A office buildings are often found in the most desirable neighborhoods and feature a variety of high-end amenities, such as state-of-the-art security systems, elevators and more. These facilities are designed to impress clients and boost a company’s public image.
Many smaller companies share office spaces to save money, especially if they are new or have only a few employees. These shared spaces may also include a reception area, meeting rooms, copy centers and more. Executive suites are more luxurious office spaces that are professionally managed and rented to business professionals on a per-office basis.
Leasing office space offers numerous advantages to businesses, such as the ability to avoid maintenance costs and property taxes. Landlords typically take care of all building repairs and upgrades, making it easier to focus on growing a business. In addition, lease terms are usually shorter than mortgages, which allow for increased flexibility to accommodate a changing business model.
Buying office space is an excellent investment for business owners who plan to establish a long-term presence in a particular location or if they anticipate the need for more space in the near future. However, buying can require higher upfront costs than leasing and can result in unexpected expenses like renovations or property tax increases. In addition, mortgage payments can snowball over time and end up being more expensive than renting.
Retail Space
Retail space is used by businesses that sell consumer-facing goods like groceries, clothing stores or department stores. Typically, these spaces are found in groups – like strip malls or retail parks – and may feature large glass windows with products or mannequins to catch passersby’s attention. Retail spaces are also sometimes found in larger shopping centers, known as power centers or Big Box Centers, where there is ample parking and access to major highways or thoroughfares.
While some retailers own their property, the vast majority of commercial spaces are leased by tenants who pay an annual rental rate to the building owner or group of investors. This type of investment can be more complicated than direct investing in residential real estate, as the tenants can make or break a business’s profitability.
Commercial real estate is typically much more expensive than residential properties, and the prices of commercial spaces can fluctuate significantly depending on the current state of the economy. However, it can still be a solid choice for investment as many owners receive substantial income from their tenant rents, which are often a significant portion of the business’s operating costs.
There are a variety of different types of commercial space, including special purpose spaces, industrial, affordable housing and multifamily spaces. These spaces can be purchased or leased and may be owned by individuals, corporations, banks, or government agencies. Other types of commercial space include office buildings, medical centers, malls, warehouses, farm land and more.
Industrial Space
When most people think of commercial real estate, they gravitate toward the properties they’re familiar with: offices (where workers work) and retail stores (where shoppers shop). What they don’t typically consider are the industrial spaces where goods are made, stored and shipped.
Despite recent concern over the economic outlook, industrial space is booming. The e-commerce boom has driven a spike in warehouse needs, and companies have been snapping up properties that can accommodate distribution operations. In the meantime, new construction of industrial facilities is taking place at a brisk pace to keep up with demand.
While some people think of factories when they think of industrial space, the truth is that it’s quite diverse. Manufacturing facilities can be as heavy-duty as Tesla’s Gigafactory or as light as a sewing factory. Regardless of the type of facility, most manufacturing businesses need a warehouse-type property to store products and coordinate shipping routes.
Some people also use industrial space as a showroom, which can be an effective way to market products. For example, a car dealership uses office space, warehouse space and showroom ground to create a comprehensive and functional property that caters to the needs of customers and employees alike. These are known as flex spaces.
Warehouse and industrial space tend to have more specialized lease agreements than office and retail property types. For instance, warehouse leases often require long-term contracts with a focus on storage capacity, logistics infrastructure and utilities. By contrast, many industrial space tenants choose triple net leases, which essentially shift all financial responsibility from the owner to the tenant. This helps minimize the risk of unforeseen costs and enables tenants to focus on their operational goals.
Mixed-Use Space
Mixed-use space is commercial property that includes both residential and business spaces. This property type is most often seen in downtown areas, where businesses and homes sit side-by-side. In New York City, the classic example of this property type is a storefront building with apartments above and retail below.
For real estate investors, mixed use properties offer many advantages. They allow investors to diversify their income streams and reduce overall risk in their real estate portfolios. Additionally, mixed-use properties tend to hold their value well during economic downturns due to their sustained demand.
Moreover, mixed-use properties often have a greater return on investment than standalone commercial buildings. This is due to the fact that they have higher foot traffic and are more visible than standalone stores. Additionally, when investing in a mixed-use property, it is important to consider the potential zoning laws and regulations. Some municipalities do not allow residential and commercial properties in the same building, while others have specific requirements that need to be met.
Aside from the financial benefits of investing in a mixed-use property, these developments also foster community and sustainability. They encourage pedestrians to walk or ride their bikes, which reduces carbon footprints and traffic congestion. Additionally, they are often in close proximity to other amenities and services, such as restaurants, shopping, and schools.
For real estate investors, there are two main paths to becoming involved with this property type: development and direct investing. The former involves developing a mixed-use project from the ground up. This can be a great way to get started with this property type, but it is also important to research the market thoroughly before making a decision. The latter involves purchasing an existing mixed-use property and updating or renovating it.
Multi-Family Space
Multifamily space is another important category within commercial real estate. It’s used to refer to any property that houses more than one household, which can range from two-unit duplexes to large apartment complexes. Multifamily properties are often classified as both residential and commercial based on their intent and the number of units they contain. The classification can impact financing options, tax obligations and long-term investment strategies.
The most straightforward way to categorize multifamily spaces is based on the number of units they contain. Buildings with two to four units are considered residential while those with five or more are considered commercial. The number of units alone isn’t enough to determine if a building is multifamily, however. Other factors such as the purpose of the building, local zoning laws and how the property is managed all play a role in the classification.
Investing in a multifamily property comes with its own unique advantages. The primary benefit is cash flow. Unlike industrial and retail spaces, where a single vacancy can collapse your profit margin, losing a couple of residential tenants in a multifamily property doesn’t threaten your ability to make your monthly mortgage payment. In addition, the cost of managing a multifamily property is generally much cheaper than owning other commercial property types.
The best candidates for multifamily investing include people who want to get into the real estate game but aren’t ready to purchase a single-family home. They can also be a good choice for retirees who want to downsize in a secure and stable living environment without the responsibility of maintaining a large single-family home. Moreover, multifamily investments are ideal for investors who want to diversify their portfolios and earn rental income on an ongoing basis.
