An Introduction to Property Types in Commercial Real Estate

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Real estate as an asset class includes a widely varied group of property types. If you’re new to the world of commercial real estate, the diversity of property types might feel overwhelming! Below we’ve included a short guide to the various opportunities in commercial real estate, including some examples of where you might find these property types in our local area.

  • Retail: These are places where consumers go to shop, dine, and seek entertainment. Retail properties can range from strip malls to a standalone building and are popular in mixed-use developments (areas that blend commercial and residential properties). Some examples of local retail properties would be Ambassador Plaza in Mobile, at the northwest corner of Airport Blvd. and Schillinger Rd., or the many freestanding seafood restaurants along the causeway.
Photo of retail shopping center/strip mall in Daphne Alabama
Jubilee Point a retail shopping center on Hwy 98 in Daphne, AL
Interior of a warehouse with shelving full of supplies and boxes. Forklifts are moving around the warehouse to collect items.
Example of an industrial warehouse
  • Office: Office buildings are one of the most recognizable types of commercial properties, and the topic of much discussion in big cities as working from home has gained traction in some traditionally-office-based sectors. Class A buildings represent premier, modern spaces in prime locations, often commanding higher rents, such as the White-Spunner Construction headquarters in Mobile. Class B and C buildings may offer more affordable options but might require some upgrades or maintenance, such as some of the office spaces available in downtown Mobile.
  • Healthcare: Healthcare properties include medical offices, clinics, hospitals, and specialized facilities, such as senior living communities. The demand for healthcare real estate is driven by the aging population and evolving healthcare industry. With Mobile being home to the USAHealth academic system of hospitals and clinics, and south Alabama being a popular place to retire, investment in healthcare properties in our area offer potential for long-term growth and cash flow.
  • Hospitality: These properties include hotels, resorts, motels, and vacation rentals – all popular property types along Alabama’s beautiful beaches! Hospitality properties cater to tourists, as well as business travelers and other short-term guests. While you may only think of the Gulf Shores region as a hot-spot for hospitality properties in our area, there is a good amount of demand for hospitality within the city of Mobile as well.
Battlehouse Hotel in downtown Mobile shown at night with lights illuminating the balconies and the RSA tower in the background.
Battlehouse Hotel in downtown Mobile
  • Mixed-Use Developments
    1. Mixed-use developments combine multiple property types, such as residential, retail, office, and entertainment, within a single project. These developments aim to create vibrant, walkable communities that integrate “live, work, and play” into one area. These type of developments are becoming more popular in our area and if you’re paying attention, you’ll begin to notice them in both Mobile and Baldwin counties.
  • Multifamily
    1. Multifamily properties are buildings that offer residential units for rent; these can range from small duplexes to large-scale apartment complexes. Small multifamilies can be an easier property type for first-time real estate investors to attain, though careful analysis of the location, market demand, and predicted cash flow is vital. Our region’s varied economic base can make Mobile and Baldwin counties attractive to multi-family investors.

Understanding the major property types in real estate is crucial for anyone new to the field or looking to invest in the real estate asset class. If you are looking to diversify your portfolio into commercial real estate, our team would be happy to assist. Give us a call today!

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