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What's the Difference Between Commercial & Retail Buildings? May 4, 2020

Rochester, Monroe
What's the Difference Between Commercial & Retail Buildings?, Rochester, New York

People unfamiliar or new to the real estate sector often confuse retail buildings and properties with commercial real estate. Knowing the difference between the two can help business owners who are interested in purchasing property. Here’s a guide to help you understand these two types of real estate.

What Is Commercial Real Estate? 

Commercial properties are the buildings and lots that are situated in commercial zones, meaning they’re meant purely for businesses. Depending on the type of industry, they’re usually located in the city center, or close to it. The closer your property is to important roads and amenities, the higher its value. 

Commercial real estate is separated into four categories:

  • Office: This type of property is used mainly for administrative and clerical purposes. It can be found in urban or suburban locations.
  • Multifamily: This is partially residential real estate. It comprises properties like apartments, condominiums, and student housing. 
  • Industrial: These are properties for warehouses and factories. They’re usually located some distance away from urbanized and residential areas since they often generate some pollution. 
  • Retail: These are all the properties that are used by retail businesses. 

What Makes Retail Real Estate Different? 

Retail properties are also commercial real estatea part of commercial real estate, but they’re for a much more specific purpose. They pertain to the buildings that are occupied by businesses that sell their products and services directly to customers. The tenants of a retail building can include salons, laundromats, clothing stores, pharmacies, and restaurants.

Some examples of retail buildings are malls, strip centers, and community retail centers, which have multiple tenants. Single-tenant retail buildings also exist, but they’re usually occupied by big brand names like Walmart® and IKEA®. 

Why Is Differentiating Them Important?

Specifying that a property is for retail helps determine its value. Retail spaces are often pricier than office spaces since they’re typically situated in prime locations that see a high volume of traffic. That makes them highly sought after since locations that attract more people tend to generate more sales.


If you’re looking for professionals who can assist you with commercial real estate management, contact Galvin Realty Group, Inc. in Rochester, NY. They have over 50 years of experience working with landlords and commercial space owners on their real estate planning and appraisal needs throughout Monroe and the surrounding counties. Message them at their website or call (585) 546-1290 for inquiries and appointments.

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