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  1. #1
    Join Date
    Nov 2011
    Posts
    448

    Default Differences between industrial & commercial?

    the main differences between industrial and commercial real estate?

    How about the differences with regards to investing in them? vacancy rates? fees?

  2. #2
    Join Date
    Sep 2004
    Location
    Central Otago, ChCh, AKL
    Posts
    2,005

    Default

    differences between industrial and commercial real
    Hi Mattinvestor,

    it is like asking "whats the different between Orange and Fruit?" = Orange is a fruit.

    Industrial is a sector / type of property within the Commercial property sector, same like a residential block of flats if still comes under residential property investing and the Residential Tenancy Act still governs.

    In the Commercial property sector you have Industrial, Office, Tourism, and Retail etc. (which is probably what you referred to?)

    in general there is no different with which Lease document to use when signing a tenant (which is a commercial property lease) BUT there is different of risk level, achievable yields, market condition within the sector economy that can influence the Deal.
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  3. #3
    Join Date
    Nov 2011
    Posts
    448

    Default

    OK. I understand that industrial is a subsector of commercial.
    But what is involved with industrial - is it mainly factories, warehouses?

  4. #4

    Default

    Industrial can be factories, warehouses and industrially zoned land.
    Commercial is generally office and retail buildings.

    You need to be very wary of what you are doing when investing in Commercial property as there are a lot more things to think about. If you buy a property in the wrong spot, it can sit vacant for 6-12 months very easily. In saying this, if you buy a property in the right spot, it is not uncommon for tenants to stay for 5, 10, 20 or 30 years at the one place with annual rental increases.

    Also keep in mind that finance is more difficult to obtain for commercial and industrial properties.

    I hope this helps somewhat!


 

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