Commercial property

You need to understand what commercial property is. Here’s what to know.

What is commercial property?

Any property that is zoned or used solely for business purposes is a commercial property. This may include shopping centers, strip malls, hotels, retail stores, warehouses, restaurants, industrial spaces, farms, office buildings and even vacant lots that have been designated as commercial property by a local government.

Deeper definition

In most municipalities, an individual cannot build a business on a residential property or a home on a commercial property. This is because commercial properties have certain standards that the owner or builder must observe when constructing a business.

These can range from the style of building or a minimum number of parking spaces. In many cases, commercial properties are located next to each other in a particular municipality to prevent the disruption of residential communities. Commercial properties also may have different tax rates compared to other types of properties.

Commercial property example

Often, commercial properties are broken down into specific categories. These include:

  • Industrial — Industrial properties usually include heavy manufacturing, light assembly and warehouses. These types of properties are typically large, have been reconfigured to accommodate heavy machinery, have easy highway access and may include office space.
  • Retail — Retail properties are some of the most common commercial properties, and they may include strip malls, community centers and regional shopping malls. They range in size and may be home to one or hundreds of individual stores and businesses.
  • Office — Office properties are typically located in urban and suburban areas. In large cities like Los Angeles, Atlanta or Jacksonville, these properties are usually high-rise buildings. Outside of major cities, they may be office parks, mid-rise buildings or office campuses.
  • Multifamily — Apartment buildings may seem like residential properties, but they are actually commercial. This is true for garden, mid-rise and high-rise apartments.
  • Hotels — Hotels are considered commercial property, no matter the size or type. This includes extended stay hotels, full service hotels and limited service hotels.
  • Land — Land zoned for commercial property typically fall into three categories. Brownfield land was once zoned for industrial use and may be impaired. Infill land is land that has been developed but is now vacant. Greenfield land is undeveloped land.
  • Special purpose — Most other types of commercial property fall into the special purpose category. This might include places like car washes, self-storage buildings, theme parks, nursing homes, churches and marinas.


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