Business Glossary

real estate that includes incomeproducing property, such as office buildings, restaurants, shopping centers, hotels, industrial parks, warehouses, and factories. Commercial property usually must be zoned for business purposes. It is possible to invest in commercial property directly, or through Real Estate Investment Trust or real estate limited partnership . Investors receive income from rents and capital appreciation if the property is sold at a profit. Investing in commercial property also entails large risks, such as nonpayment of rent by tenants or a decline in property values because of overbuilding or low demand.

property intended for use by retail, wholesale, office, hotel, or service users, or for manufacturing or other industrial purposes. Examples are shopping centers, office buildings, hotels and motels, and resorts or restaurants. For many years, commercial property has been treated less favorably under the tax laws than residential rental property.

See also industrial property

property designed for use by retail, wholesale, office, hotel, or service users.

Example: An investor is interested in purchasing commercial property for investment. A broker might show the investor shopping centers, office buildings, hotels and motels, resorts or restaurants.