Commercial Real Estate

Commercial real estate is the process by which an entity makes the improvements to real property for increasing its value.  A Real estate that is held for the production of income by giving leases to Commercial or Business use, after improvement.

In a commercial real estate a developer may choose to develop the retail properties, hotels, warehouses, shopping centers, commercial property, office buildings, apartment complexes, residential property i.e multi family consisting of 5 or more units and vacant lands.  Except a single family home all the other types of real estates comes under this Commercial Real Estate.

Real estate developers typically acquire natural or unimproved land and improve or alter it with utility connections, roads, entitlements etc.,  Once these improvements were made to the raw or unimproved land, it is subdivided and sold to profits for individuals.

About Commercial Real Estate Projects

Commercial real estate sometimes referred to as Real Estate Development :

There are two major categories of real estate development activity.

Land Development :

Land developers typically acquire some raw land or unimproved land and improve or alter it by constructing commercial complexes, retail offices etc., including the infrastructure,  necessary roads, convenants and entitlements. 

Convenants is also refers to an agreement

It means that the future development of the built property may take place by the second and third party.  However some deed restrictions may also be there.


An Entitlement is sometimes called as permit

Entitlements are secured legal permissions from the regulatory bodies.  It is a legal method of obtaining approvals for the right to develop a property for a desired use. 

Building Development :  

Real estate developers acquire raw land, improved land or redevelopable property in order to construct building projects.  Then the buildings are sold entirely or in parts to others.  Some building developers will have their own internal departments for designing and for constructing buildings, while some developers will give a subcontract for these activities. 

The process of the commercial real estate varies from project to project, but the various phases that are involved in this commercial real estate process involves :

Market research :

It is a process of gathering informations, recording, analysing the project and information about the customers, competitors and the market.


Site selection : 

It refers to the land or the location.  A preliminary study should be done for selecting the site, determining the value of a site and this study is also called as feasibility study.


Property acquisition : 

The better option is to buy a property or a land which is having a clear title.

To design a project, obtaining entitlements, financing, construction, lease up or sale are the other phases that are involved in the commercial real estate process.

     
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