Valhalla NY Commercial property - The term commercial property (also called investment or income property) refers to buildings or land intended to generate a profit, either from capital gain or rental income.
Definition: Commercial Property - Commercial property includes office buildings, industrial property, medical centers, hotels, malls, retail stores, shopping centers, farm land, multifamily housing buildings, warehouses, and garages. In many states, residential property containing more than a certain number of units qualifies as commercial property for borrowing and tax purposes.
Categories of Commercial Real Estate Category
Commercial real estate is commonly divided into four categories:
Retail - medical centers, hotels, malls, retail stores, shopping centers, public housesOffice - office buildingsIndustrial - industrial property, office/warehouses, garages, distribution centersMultifamily (apartments) - multifamily housing buildings
Of these, only the first three are classified as being commercial buildings. Residential Income Property may also be used to mean Multifamily Apartments.
A commercial building is a building that is used for commercial use. Types can include office buildings, warehouses, or retail (i.e. convenience stores, 'big box' stores, shopping malls, etc.). In urban locations, a commercial building often combines functions, such as an office on levels 2-10, with retail on floor 1. Local authorities commonly maintain strict regulations on commercial zoning, and have the authority to designate any zoned area as such. A business must be located in a commercial area or area zoned at least partially for commerce.
The total value of commercial property in the United States was approximately $11 trillion in 2009, as measured by the CoStar Group and published in the Journal of Real Estate Management. According to Real Capital Analytics, a New York real estate research firm, more than $160 billion of commercial properties in the U.S. are now in default, foreclosure or bankruptcy.
Office structure - There are many different ways of arranging the space in an office and while these vary according to function, managerial fashions and the culture of specific companies can be even more important. Choices include, how many people will work within the same room. At one extreme, each individual worker will have their own room; at the other extreme a large open plan office can be made up of one main room with tens or hundreds of people working in the same space. Open plan offices put multiple workers together in the same space, and some studies have shown that they can improve short term productivity, i.e. within a single software project. At the same time, the loss of privacy and security can increase the incidence of theft and loss of company secrets. A type of compromise between open plan and individual rooms is provided by the cubicle, possibly made most famous by the Dilbert cartoon series, which solves visual privacy to some extent, but often fails on acoustic separation and security. Most cubicles also require the occupant to sit with their back towards anyone who might be approaching; workers in walled offices almost always try to position their normal work seats and desks so that they can see someone entering, and in some instances, install tiny mirrors on things such as computer monitors
While offices can be built in almost any location in almost any building, some modern requirements for offices make this more difficult. These requirements can be both legal (e.g. light levels must be sufficient) or technical (e.g. requirements for computer networking). Alongside such other requirements such as security and flexibility of layout, this has led to the creation of special buildings which are dedicated only or primarily for use as offices. An office building, also known as an office block or business centre is a form of commercial building which contains spaces mainly designed to be used for offices.
The primary purpose of an office building is to provide a workplace and working environment primarily for administrative and managerial workers. These workers usually occupy set areas within the office building, and usually are provided with desks, PCs and other equipment they may need within these areas.
An office building will be divided into sections for different companies or may be dedicated to one company. In either case, each company will typically have a reception area, one or several meeting rooms, singular or open-plan offices, as well as toilets.
Many office buildings also have kitchen facilities and a staff room, where workers can have lunch or take a short break. Many office spaces are now also serviced office spaces, which means that those occupying a space or building can share facilities.
Office and retail rental rates - Rental rates for office and retail space are typically quoted in terms of money per floor-area–time, usually money per floor-area–year. For example, the rate for a particular property may be 290 dollars per square-meter–year ($290/m2·a) (or $29/ft2·a), and rates in the area could range $200/m2·a–$500/m2·a.
In many countries, rent is typically paid monthly even if usually discussed in terms of years.
Example: A particular 200 m2 space is priced at $150/m2·a: (200 m2) × ($150/m2·a) / (12 mo/a) = $2500/month
In a gross lease, the rate quoted is an all-inclusive rate. One pays a set amount of rent per time and the landlord is responsible for all other expenses such as costs of utilities, taxes, insurance, maintenance, and repairs.
The triple net lease is one in which the tenant is liable for a share of various expenses such as property taxes, insurance, maintenance, utilities, climate control, repairs, janitorial services and landscaping.
Grading - The Building Owners and Managers Association (BOMA) classifies office space into three categories: Class A, Class B, and Class C. According to BOMA, Class A office buildings have the "most prestigious buildings competing for premier office users with rents above average for the area." BOMA states that Class A facilities have "high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence." BOMA describes Class B office buildings as those that compete "for a wide range of users with rents in the average range for the area." BOMA states that Class B buildings have "adequate systems" and finishes that "are fair to good for the area," but that the buildings do not compete with Class A buildings for the same prices. According to BOMA Class C buildings are aimed towards "tenants requiring functional space at rents below the average for the area.