Tag: investment

What Are The Different Classifications Of Commercial Real Estate Properties?

Commercial real estate is classified under several forms of aesthetics. Generally, commercial properties are divided into three classes: Class A, Class B, and Class C.

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Class A commercial real estate developments are considered the best buildings in terms of aesthetics, age, quality, and built-in infrastructure, as well as location. This can be your five-star hotel, a mall, or an office building that’s regarded as the best in its category. These properties are also highly expensive in terms of sale or rental.

Class B commercial real estate buildings are not as competitive price-wise compared to Class A establishments. These are older buildings that investors may want to renovate or restore. These could be previously Class A commercial real estate properties that have lost some of their value over time due to aging infrastructure, design, and amenities. Their location is also not as exquisite as Class A but still remain reputable.

Class C commercial real estate properties are usually the oldest, with some older than 20 years. These properties are also not in prime locations and are in need of major renovations or constant maintenance. Others dub Class C commercial real estate as everything else that is not Class A or B.

Apart from these classifications, commercial real estate can also be divided by their use. In this category, we have office properties, industrial properties, retail, multifamily, hotel, and land-based properties.

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Randy Benderson is the president of Benderson Development, a venture his father, Nathan Benderson, established in New York over 60 years ago. Randy is passionate about pursuing all the opportunities before him. For more insights on commercial real estate, follow this Twitter account.

Is 2018 Going Be a Great Year For Commercial Real Estate?

Industry experts expect the new year to be one of slow and steady growth for commercial real estate, and the main advice is to start diversifying your real estate portfolio. Below are more specific developments in various sectors to keep in mind in 2018.

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Due largely to the strengthening global economy and likely tax cuts from Washington, the U.S. economy is gaining a new lease on life. Expansion in the property sector has been going on for over 100 months, and by mid-2018, it will be the second longest in U.S. history.

As far as the multifamily sector is concerned, the market will see more construction of apartments that might put downward pressure on occupancy rates and rents. Colliers International Chief Economist Andrew Nelson Colliers reports that economists embracing the new tax law will lead to more demand in the multifamily market: this is because the new system reduced some of the benefits of homeownership, making it less attractive and renting more likely.

Meanwhile, though slightly down from its 2015 peak, job growth for office markets remains robust. Employers added 175,000 jobs on average per month in 2017, compared to 2015’s 250,000. Still, the sector will try to find a fine balance as new supply levels converge with occupancy rates and asking rents.

Lastly, industrial real estate should retain its upward momentum this year with the sector’s record-breaking occupancy and rents. Construction is booming as operators continue to push toward online delivery and get products to consumers more quickly as modern multilevel distribution hubs open in densely populated markets.

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Randy Benderson is the president of Benderson Development, a venture his father Nathan Benderson established in New York over 60 years ago. Now carrying the torch of his late father’s legacy, Randy continues to oversee over 8,000 employees and committed to an excellent work ethic and passion for growth. More on the company here.