Commercial property includes offices, malls, hotels, and gas stations used for company’s money-making efforts. Real estate zoning laws vary and commercial properties are subject to a specific tax structure. Some jurisdictions have difficulty distinguishing between commercial and industrial property, especially if the property includes both manufacturing and retail space.
Commercial property is real estate designed for use in specific types of commercial situations. Unlike industrial property, which would include manufacturing plants, commercial use property encompasses commercial properties such as offices, malls, hotels, and gas stations. The key indicator is that you are involved with a company’s money-making efforts, but not engaged in the actual production of goods.
Real estate zoning laws can vary slightly when it comes to commercial property from one jurisdiction to another. However, these laws tend to draw a clear line between residential, industrial, and commercial property. This can sometimes be confusing for some people, as some types of living space can be used for commercial purposes. For example, a residential home would not be considered commercial property in most cases, even if the home was rented as part of a commercial enterprise. At the same time, an apartment building with multiple units of living space would be considered suitable commercial property.
Research facilities are also often understood as commercial property. This would include laboratories and hospitals with laboratory functions housed within the structure. Similarly, facilities that provide basic services to customers, such as doctor’s offices, would also meet the general definition.
As with all zoned properties, commercial properties are subject to a specific tax structure within the local jurisdiction. In many cases, cities can offer incentives that help attract businesses to properties within city limits, in exchange for a property tax break for a specified period of time. This type of incentive is often extended when the business is anticipated to provide a significant benefit to the community.
In some jurisdictions, the distinction between commercial and industrial property is somewhat difficult to identify. This is especially true if the property includes both manufacturing and retail space within the structure. In some areas, companies that want to host more than one function within the same building must obtain a waiver from the local jurisdiction to allow production and retail functions to co-exist.
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