Commercial property is real estate that is used for business activities. Commercial property usually refers to buildings that house businesses, but can also refer to land used to generate a profit, as well as large residential rental properties. The designation of a property as a commercial property has implications for how it is financed, how it is taxed, and how the laws are applied to it.
Commercial real estate provides rental income as well as the potential some capital appreciation for investors.
• Hedge against stock market
• High-yielding source of income
• Stable cash flows from long-term tenants
• Capital appreciation potential
• More capital required to directly invest
• Greater regulation
• Higher renovation costs
• Illiquid asset