There’s a misconception that all commercial buildings are created equal. In fact, every construction project is unique. Each project has its own nuances and is designed to meet the client’s needs and personalized based on the building’s use.
Regardless of what you’re looking to build, the first step is choosing a top-notch commercial construction company that understands these nuances. It’s also a good idea to know more about the different classifications of commercial properties.
Similar to multifamily properties, office buildings are classified by their size, and usually fall into one of three categories: Class A, Class B, or Class C.
- Class A buildings are top of their class with regards to location and construction quality.
- Class B properties have better construction, but the location may not be the best.
- Class C are rundown, need rehabbing, and located in an undesirable area.
Central business district (CBD) office buildings are in the heart of metropolitan cities and include high rise offices in downtown areas. Suburban office buildings are mid-rise and can be found outside of the city center, and can often be found in office parks.
These buildings vary in size depending on what they’ll be used for. Most manufacturers would consider their facilities to be “heavy manufacturing”. They’re built to accommodate machinery and are heavily customized, which means another tenant would have to renovate in order for the property to fit their needs. Light assembly can also house manufacturing operations, but they’re much more streamlined and could be reconfigured — think storage facilities and office space.
Flex space is mixed-use and falls under the umbrella of industrial property and can easily be converted to meet a variety of needs. Bulk warehouses span the range of 50,000-1,000,000 square feet in terms of footprint and need easy access for transportation to and from the property for distribution and logistics.
Strip malls or shopping centers are small properties that may or may not include a larger, big-name tenant that will help draw in shoppers — like a grocery store or drugstore. These strip malls also contain a mix of different types of small retail businesses. Community retail centers are a bit larger and have multiple anchors and at least one restaurant.
Power centers are even larger, and include smaller retailers and anchored by big box stores and generally contain several out parcels, which are pieces of land designated for standalone tenants like banks or restaurants with drive-throughs. Regional malls top the list, maxing out at 2,000,000 square feet.
These commercial properties are like a hybrid of residential and commercial real estate and primarily used as investments. Multifamily classification ranges from something as small as “plex” properties (duplex, triplex, quadruplex) to large apartment buildings, which are defined by the number of stories they have.
Garden apartments are 3-4 stories with 50-400 units, no elevators, and surface parking. It’s a collection of apartment building clusters that share space like dog parks or common outdoor areas. Mid-rise apartments are usually in urban locations and stretch up to 12 stories with elevator service. High-rise apartments are located in larger markets and boast over 100 units.
Brands like Ritz-Carlton are considered full-service hotels, which can be found in business districts and tourist areas, and offer amenities like full kitchens and event space. Limited-service hotels are boutique properties that don’t support those amenities. Extended stay hotels accommodate long-term guests and have large rooms and kitchens.
It’s not just hospitals; it’s outpatient clinics and even veterinarian hospitals that fall in this category. They can be standalone and complex or part of retail centers, and can even be anchors in some strip malls. They’re open to all demographics and must be built with accessibility and wellbeing in mind.
Combine any of the above commercial property types and you’ll get what’s classified as mixed-use properties. They allow residents a “hub” where they can work, live, and enjoy entertainment and are becoming increasingly popular, especially in metropolitan or mid-sized cities.
While this is a classification in and of itself, it’s more of a catch-all for miscellaneous commercial properties like educational facilities, sports structures, theaters and entertainment venues, parking lots, and even zoos.