Industrial or Commercial Properties: Which is a Better Investment

When researching real estate investment, you must have come across the terms: Industrial and Commercial properties. Often times, there is an assumption that commercial properties belong in the same sector as industrial properties. However, they fall into two distinct kinds of real estate categories.

On today’s article we would be addressing the key difference between industrial and commercial real estate. What makes each sector special and help you make a distinct decision on which sector is the best option for you.

What is industrial real estate?

Industrial real estate is referred to as properties used to create, manufacture, or produce goods. In most cases, these properties are linked to the supply chain management that facilitates the transit and storage of the goods produced. Industrial real estate is essential because it is the backbone of the economic structure. These industrial properties comprise buildings like factories, warehouses, and distribution hubs, among others.

It is simple to understand the profound impact that industrial firms have on our daily lives because practically everything we own, including food and clothing, was either manufactured or stored in an industry sector at some point.

Industrial properties are typically found in rural or peri-urban settings. There are always train stations and major roads close by, which makes it easy to deliver goods and get around.

Let’s look at some examples of industrial real estate;

Industrial real estate encompasses a wide range of property types, such as:

Flexible storage facilities

Industrial and farm lands

Data facilities

Large warehouse

Cold storage

Commercial showrooms and so on.

What is commercial real estate?

Commercial real estate can be defined as any property that has the potential to create profit through capital gain or rental income. Commercial real estate might range from an office building to a duplex home, a restaurant, or even a warehouse. A property is a business if you can profit by renting it out or keeping it and selling it again.

A commercial property’s location is convenient for the general public, pedestrian-friendly, and close to a parking spot in addition to having contemporary architecture. Commercial real estate is created and utilized only for commercial needs. retail, offices, malls, offices, shopping complexes, and shops, among many others.

Examples of commercial properties are:

Multifamily homes

Retail spaces

Offices

Hospitality and hotels

Mixed-use properties

Land

COMMERCIAL OR INDUSTRIAL PROPERTY: WHICH IS BETTER?

Commercial properties typically belong to a firm that operates with the primary goal of making money, as opposed to industrial properties, which refer to any enterprise involved in the manufacture of commodities. Commercial properties create businesses like offices, restaurants, and retail stores, whereas industrial enterprises create factories and building sites. Which is preferable depends entirely on the activities that take place there and the kind of investment you want to build on.

To learn more about industrial and commercial real estate, book an appointment with Mitch and connect with the pineapple podcast on YouTube for more real estate insights.