Difference Between Industrial and Retail Property

Before we give you the answers to the difference between the two types of real estate, let’s quickly define each.

Retail and Industrial are commonly known as commercial real estate. Commercial real estate refers to a building or area of land that generates profit. Retail and Industrial are subcategories of commercial real estate.

What Is Industrial Property?

It is defined as a property used for primary manufacturing of something, so it’s generally considered as a factory or a plant. This is usually categorized into three types of industry; light, medium, and heavy. This refers to places like garages, distribution centres, and warehouses. 

What Is A Retail Property?

This is a commercial zone area primarily used for the sole purposes of selling an actual product instead of its production. Examples: malls, shopping centres, retail stores, and shops. These examples fall into the retail category.

In general, businesses often lease out commercial properties. So, the owner collects rent from each business that operates from the property. These are four main types of commercial property leases; each requires a different level of responsibility from both parties.

Commercial Real Estate Lease Types

  • Single net lease- it is the responsibility of the tenant to pay rent and property taxes.
  • Double net lease- it is the responsibility of the tenant to pay insurance, property taxes, and of course the rent.
  • Triple net lease-it is the responsibility of the tenant to pay the rent, insurance, property taxes, and maintenance.
  • Gross lease- the tenant is only responsible to pay the rent. The landlord pays the property taxes, maintenance, and insurance.

If you are unsure, stick to the experts. An example of this is commercial property leaders Facey Property.

Factors to Consider

If you find yourself considering the ownership of a commercial property, here are some factors you must consider.

Appearance- trust us, the last thing you ever want to see is an empty commercial property for any periods. No! Commercial properties look best when bustling and hustling. Think about how your potential tenants would think and want their customers to see.

Entrance- we’ve all heard of the phrase; first impression counts, well it’s simple and the truth! Aesthetic entrance is a great way to put your tenants and clients in a good mind frame.

Natural Light- lighting is king today. Nobody likes to pay extra for electricity and nobody likes to enter a dull area. So, the best thing you could look for is great lighting. The area should look great in both natural and artificial lights.

Location- think about the right location. How will people get there, what amenities are available in the area?  People look for convenience today. Having a property in a ‘difficult to reach’ area is pointless. Stay close to other buildings, public facilities and amenities, and transportation facilities.

Honestly, no matter what type of commercial property you are interested in, read the lease very carefully. See how we’ve emphasized it? It’s that important. This might sound silly but you’d be truly surprised at the number of issues that arise simply because the lease wasn’t read properly.

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