Commercial real estate (CRE)
Property used for business or to produce income, such as offices, retail, industrial buildings and larger apartment complexes. It is usually valued on its income and financed with commercial loans.
Also called: CRE, commercial property, income property
Related terms
A property's yearly income minus operating expenses, before mortgage payments and income taxes. It is the base number for cap rate and many commercial valuations.
Net operating income divided by the property's price or value. It shows the yearly return before financing and is used to compare properties and estimate value.
A lease where the tenant pays base rent plus its share of property taxes, insurance and maintenance. The landlord's income is more predictable, and the tenant takes on rising operating costs.
Property used for professional and administrative work, from small suites to high-rise towers. It is graded by class, leased by rentable square foot, and often uses full service gross leases.
Property used to sell goods or services to the public, from single storefronts to shopping centers. Visibility, traffic and co-tenants drive value, and leases are often net with CAM charges.
Property used for manufacturing, storage, distribution and logistics, including warehouses and flex buildings. Clear height, loading docks, power and highway access matter most to tenants.