The Difference Between Industrial, Retail and Commercial Real Estate

American Tourister Luggage | Kohl's
Enjoy free shipping and easy returns every day at Kohl's. Find great deals on American Tourister Luggage at Kohl's today!

SO Comfort Kids Sandals - Shoes | Kohl's
Enjoy free shipping and easy returns every day at Kohl's. Find great deals on SO Comfort Kids Sandals at Kohl's today!

Before we answer this question, it might be helpful to actually define each term first.

Retail and industrial are both considered ‘commercial real estate’ (as opposed to ‘residential real estate’). Commercial real estate refers to buildings or land intended to generate profit; industrial and retail are simply sub-categories of commercial real estate.

Firstly an industrial property is defined as a property used for the actual manufacturing of something, and can be considered either a factory or plant. This is usually zoned for light, medium or heavy industry. This includes things such as warehouses, garages and distribution centers etc.

Retail property is a commercially zoned property used solely for business purposes, the actual selling of the product, rather than its manufacture – retail stores, malls, shopping centers and shops all huddling nicely under the retail umbrella.

Generally, businesses that occupy commercial real estate often lease the space. An investor usually owns the building and collects rent from each business that operates there.

There are four primary types of commercial real estate leases, each requiring different levels of responsibility from the landlord and the tenant.

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.

Gross lease – tenant is responsible only for rent; the Landlord pays property taxes, insurance and maintenance.

If you find yourself considering Commercial property ownership, there are a few things that you would do well to keep in mind:

1) Attractive appearance – the last thing you need is a vacant commercial property in Sydney for any length of time. Think how prospective tenants think: what will their customers want to see?

2) Aesthetic entrance – first impressions count, simple, simple stuff. This is a great tool for putting your prospective clients in a great frame of mind… and their clients.

3) Natural Light – in especially high demand nowadays

4) Location – close to other offices, public amenities, transportation etc.

Since 1980, retail property has returned an average of 9%, though is currently returning around 6%. Industrial real estate tends to be the most volatile, and is currently returning around 7% (as opposed to its peak of around 12% during the 1990’s recession).

And obviously, no matter which form of commercial property you’re considering, read the lease carefully. Sounds like a silly thing to say, but you’d be very surprised at the issues that can become issues simply because things weren’t read properly!

Lovemark 10k White Gold 1/4 Carat T.W. Diamond Halo Engagement Ring
Adorned with round-cut diamonds arranged in a halo motif, this engagement ring is a beautiful way to express your unending love and commitment.

beFree Sound Bluetooth 2.1 Channel Multimedia Wired Speaker Shelf System with Reactive LED Lights...
With high quality sound and a visual light display there's a lot to love about this beFree Sound Bluetooth 2.1 Channel Wired Speaker Shelf System.

Women's Apt. 9® Tummy Control Midrise Bootcut Jeans
Fabulous essential. These women's Apt. 9 bootcut jeans will be an instant favorite.

Men's Steve Harvey Solid Textured Pleated Suit Pants
Impress the best with the modern styling of these men's Steve Harvey suit pants.

Women's Two Tone Filigree Bangle Watch
Embellished with intricate filigree detailing, this women's two-tone bangle watch.

Clarks® Cloudsteppers Arla Kaylie Women's Flip Flop Sandals
You'll like the way your feet feel when you wear these Cloudsteppers Arla Kaylie flip flops from Clarks.

Big & Tall Nike Pro Dri-FIT Tee
This men's Nike Dri-FIT tee is packed with performance facets that let you conquer your workouts in supreme comfort.

Boys 4-12 Jumping Beans® Hot Wheels Gorilla Graphic Tee
This Hot Wheels graphic tee by Jumping Beans kicks his style into gear.

You may also like...