Commercial Real
Estate FAQs

Commercial real estate (CRE) is property used exclusively for business-related purposes or to provide a workspace, while residential real estate is used as a living space. Commercial real estate is typically leased to tenants to conduct income-generating activities. It differs from residential real estate because it has the potential to generate profit for the property owner via capital gain or rental income. It also involves different types of contracts, regulations, financing options, and tax implications than residential real estate does.

The main types of commercial real estate are office space buildings, retail centers, industrial storage/warehouses, hospitality, and multifamily housing like apartment complexes and condominiums. Commercial real estate also includes specialty buildings like hotels, motels, resorts, casinos, theaters, cinemas, restaurants, bars, clubs, schools, hospitals, nursing homes, churches, stadiums, arenas, and more.

Use Farbman Group’s Properties page to browse commercial real estate listings for sale or lease in your area. Search by location, property type, size, price, and more!

Commercial real estate brokers are licensed professionals who act as intermediaries between buyers and sellers—or landlords and tenants—of commercial real estate. The right commercial broker can help you with various aspects of a commercial real estate transaction, such as:

• Finding suitable properties that match your criteria and budget

• Negotiating the best terms and price for your deal

• Preparing and reviewing contracts and lease agreements

• Conducting due diligence and market analysis

• Coordinating inspections, appraisals, and closing procedures

• Advising you on legal and regulatory issues

• Marketing and advertising your property to potential buyers or tenants

A broker can also leverage their wide network of contacts and resources. Overall, they’ll save you time, money, and hassle by representing your interests and ensuring a smooth transaction.

A commercial real estate broker is a licensed professional who helps clients buy, sell, or lease properties that will be used for business purposes. They are the intermediary between buyers and sellers (or tenants and landlords.) A commercial real estate agent is someone who works for a commercial real estate broker and carries out the day-to-day tasks of finding and showing properties, communicating with clients, writing contracts, and closing deals. A commercial real estate agent cannot work independently and must be supervised by a broker.

To buy or to lease a commercial space? That’s the big question. The answer depends on various factors such as your financial situation, business goals, and market conditions.

Buying commercial real estate gives you ownership and control over the property, so you can customize it as you wish. You can also benefit from appreciation, tax deductions, and equity build-up. However, buying commercial real estate requires a large upfront investment and will have ongoing maintenance costs and liability risks.

Leasing commercial real estate, on the other hand, gives you flexibility and convenience. You’ll avoid the hassles and expenses of ownership and maintenance. However, leasing commercial real estate also means you have to pay rent, fees, and taxes to a landlord. You also have to abide by the terms and conditions of the lease agreement, and you’ll have no equity or appreciation in the property.

Commercial real estate transactions can be financed through various sources, depending on the type, size, and purpose of the property. Some common financing options for commercial real estate include:

• Commercial real estate mortgage loan
• SBA loan
• Commercial bridge loan
• Working capital loan
• Leasehold improvement loan
• Equipment loan
• Demand loan
• Line of credit
• Vendor financing

To get approved for a commercial real estate loan, you’ll need a good credit score and perhaps even a detailed business plan for the property. Exact requirements will vary depending on what lender you’re using. To learn more about loan options, speak with a commercial real estate broker from Farbman Group today.

Zoning is a set of rules and regulations that governs how land can be used and developed in a certain area. Thus, zoning determines what types of activities and structures are allowed on a particular site. This can impact parking, signage, landscaping, capacity, and more. Zoning also affects the value of a commercial real estate property and its surrounding neighborhood.

Commercial properties are subject to various taxes at the federal, state, and local levels. Tax issues may include:

• Property taxes
• Income taxes
• Capital gains taxes
• Transfer taxes
• and more

Naturally, these may affect the cash flow, profitability, and return on investment of your commercial properties. Consider tax planning strategies or incentives specifically for commercial property owners/investors. Check out our “Commercial Property Taxes: Explained” page for more information.