What is Commercial Real Estate?
Commercial real estate refers to properties which are of "commercial" nature. The best way to think of this is a property that a business would operate out of.
There are different types of commercial properties. The most common types of commercial properties are Industrial (such as warehouses and factories, used for storage or manufacturing), Commercial (which commonly means office space) and Retail (shops and shopping centers).
A property should only be used for commercial purposes if it is appropriately zoned. Commercial properties can range from small (think a small storage space of 10m2) up to super sheds/warehouses (which could be 10,000m2 +).
Commercial real estate has its advantages. Commercial leases tend to be longer than a standard residential lease, with established companies wanting to secure a long-term place of business to operate from. Commercial leases can also allow the landlord to recoup certain costs relating to the operation of their property. This can include things like servicing of fire equipment and air conditioners, and sometimes the "outgoings" which refers to costs like council rates, land tax, water rates etc.
Types of jobs in Commercial Real Estate
Commercial Property Management is similar to residential in that the property manager will collect rent, conduct inspections, negotiate lease renewals and rent reviews, arrange repairs/maintenance. However, a commercial property manager will need to be aware of things like the "Consumer Price Index" and have good negotiation skills. You are dealing with business people from both a landlord and tenant perspective and business people like to negotiate!
Types of skills needed to work in Commercial Real Estate
A commercial real estate agent will ideally have a large skill set – although if you are starting in an entry level role, you will learn a lot on the job!
Some skills which are beneficial include:
- Being a strong negotiator
- Reasonable numeracy skills (you may be required to provide budgeting)
- Good written and verbal communication skills
- Be able to solve problems and not shy away from them
- Ability to work both in a team and independently
- Good time management
- Ability to prioritise tasks