{"id":2641,"date":"2022-01-12T08:55:36","date_gmt":"2022-01-12T08:55:36","guid":{"rendered":"https:\/\/alliancecgc.com\/?p=2641"},"modified":"2022-05-03T19:20:23","modified_gmt":"2022-05-03T19:20:23","slug":"different-types-commercial-real-estate","status":"publish","type":"page","link":"https:\/\/alliancecgc.com\/education\/different-types-commercial-real-estate\/","title":{"rendered":"What Are the Different Types of Commercial Real Estate?"},"content":{"rendered":"\nEducation<\/a>\n\t

Commercial real estate is a term that covers a broad spectrum of asset types, classes, locations, and markets. It is an industry that institutional investors have had access to for some 30 years or so, that high net worth individuals have been investing in for generations, and that, due to recent regulatory changes, accredited investors<\/a> nationwide can get involved with for the first time in history.<\/p>\n

Even after a year in which the global economy was shaken to its core by an unprecedented pandemic, the demand for commercial real estate<\/strong><\/a> has continued upwards<\/strong> as seasoned, and new investors alike try to find opportunities resulting from the shakeup. The opportunities are there, and in this article we outline and categorize the different types of commercial real estate and then dive into some of the different asset class nuances.<\/p>\n

\n\t\tWhy is Demand for Commercial Real Estate Growing?\n\t<\/h3>\n\t

The demand for commercial real estate is growing due to multiple factors<\/strong>. Baby boomers<\/a> are leaving the workforce and demanding residential communities to retire into, millennials are utilizing technology to establish new businesses, and population growth, both within the existing citizenry, includes many entrepreneurial first-generation and naturalized Americans.<\/p>\n

Beyond merely demographic shift, advancements in technology, the implementation of incentive-driven tax policies, and the emergence of industries that had not existed only a decade ago are resulting in economic opportunities in places where they did not exist earlier<\/strong>.<\/p>\n

For example, in recent years, particularly since the beginning of the 2020 pandemic, reliable access to high-speed internet has become an absolute necessity for businesses. This access has only recently reached the levels where businesses can use it without concern that poor connectivity will cause problems.<\/p>\n

The impact on commercial real estate that this trend has had is to expand accessibility to effective communications through the internet to a far larger swath of the country, making previously impractical locations now ready for commerce and growth<\/strong> – and with that an increase in demand for commercial real estate to house the growing demand.<\/p>\n

A look at the chart below shows that in an incredibly short period of time, U.S. internet service providers realized they had to increase their performance or risk losing customers to competitors who were doing what they did not or could not.<\/p>\n\t\t\t\t\"national\n\t

Source: https:\/\/www.reviews.org\/internet-service\/internet-speeds-during-covid-19-quarantine\/<\/a><\/p>\n\t

The most significant result of increased broadband access has been that secondary or tertiary markets outside of cities and metropolitan areas are now in play<\/strong> for businesses that want to establish a physical location. Cheaper rents and lower overall cost of living allow businesses to attract employee talents through higher wages, more generous benefit packages, and improvements to the structures where employees work.<\/p>\n

In turn this drives demand for more and higher quality residential multifamily communities<\/strong>, senior housing facilities<\/strong> as families migrate away from urban centers, and for hospitality assets<\/strong> as people seek new places to spend their free time.<\/p>\n\t

In turn this drives demand for more and higher quality residential multifamily communities<\/strong>, senior housing facilities<\/strong> as families migrate away from urban centers, and for hospitality assets<\/strong> as people seek new places to spend their free time.<\/p>\n

Different markets are bound to require different levels of each type of asset and the pie charts below contrasts asset classes between cities and suburbs<\/p>\n\t\t\t\t\"centreforcities\"\n\t

Lastly, and most simply, the population is at an all-time high<\/a>. This mixture of new industries fueled by increased access to technology, a departure of baby boomers from the workforce, and an increased population with many first-generation Americans and naturalized citizens that came here due to<\/em> their entrepreneurial spirit are all fueling the increased demand for commercial real estate. <\/strong><\/p>\n

Related Link:Are You Missing the Boat on SPACs?<\/a><\/p>\n

\n\t\tSubscribe to our commercial real estate newsletter.\n\t<\/h5>\n\t\t\t\n\t\t\t\t\t\t\tBECOME AN INVESTOR\n\t\t\t\t\t<\/a>\n

\n\t\tIs Demand for Office Space Dead?\n\t<\/h3>\n\t

Commercial office space is not dead<\/strong>, as many pundits and talking heads prematurely suggested earlier in the pandemic. Despite an increase in telecommunications, businesses will remain in need of headquarters and satellite officers to nurture rising talent and expand into new markets.<\/p>\n

According to real estate services company, JLL<\/a>, there are many reasons to be bullish about demand for office space:<\/p>\n