Commercial real estate: what it covers

Commercial property, also called commercial real estate, is land or buildings used for conducting commerce, whether that means selling products or providing services. What makes it commercial is the purpose behind it: the property is meant to bring in a profit. That profit may come from running a business, from capital gains, or from rent.

The types named include office buildings, warehouses and garages, along with medical centres, hotels, malls and retail stores. Multifamily housing buildings and farm land are named as well, so the list is not limited to built structures. Land sits among the types beside the buildings.

A commercial building is one used for commercial purposes. Office buildings and warehouses are among the examples given, and retail buildings are another. Retail buildings take in shopping malls, convenience stores and 'big box' stores.

In cities, a building may combine functions. Offices can occupy the upper levels while retail takes the ground floor. Where the space given over to several functions makes up a significant part of the whole, a building of this kind can be called multi-use.

Zoning governs where commerce is allowed. Local authorities commonly keep strict rules on commercial zoning, and they have the power to designate a zoned area as commercial. Where commercial zoning applies, a business sits in a commercial area or in one zoned at least partly for commerce.