Commercial Real Estate

Commercial real estate is designed specifically to house business operations rather than households. This broad category includes office buildings, retail stores, shopping centers, and even large apartment complexes (properties with five or more units are generally considered commercial for lending purposes). Unlike residential leases which are usually for one year, commercial leases are often long-term, spanning five, ten, or even twenty years. The value of a commercial property is tied directly to its potential for generating income. Therefore, investors heavily analyze the financial strength of the tenants (such as a major grocery store anchor vs. a small local shop) and the "traffic" of the location.