Office, industrial, retail, and multi-family housing (above five units) that is used for industrial, commercial, medical, residential or educational purposes qualify as commercial properties. Vacant or raw land that is zoned for commercial or retail is also included in the classification. Basically anything that isn't used for a single family residence can be considered commercial.
Commercial real estate is a growing trend in the United States. According to the National Association of Realtors Commercial Real Estate Outlook for 2007:
- Overall, office spaces are in greater demand and vacancy rates are hovering around 8-11% in metro areas, one of the lowest ever, and rental rates are rising at least 3%.
- The demand for industrial spaces is being fueled by trade with China. Development is predicted to increase by 20% to replace dilapidated buildings and construct new ones.
- In the retail market, strip spaces are growing with ferocity. The vacancy rate is predicted to decline slightly with rents increasing 4% in major markets.
- Multi-family housing trends include a tremendous decline in vacancies due to apartments being converted to condos, which is accompanied by increased rents.
- The hospitality market is still recovering from 2001, but is slowly rising with some new construction.
Loans usually require 20-30% down and are offered at a higher interest rate than loans for residential properties. See Loans for more information.
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