Asset Type Breakdown

by | Apr 30, 2022

Commercial real estate, or CRE, is one of the largest asset classes in the United States. Commercial real estate covers a multitude of different categories. Most businesses will need physical space to operate and generate income which creates a variety of investment opportunities for anyone looking to diversify their portfolio. Below we will break down each of the asset types within the commercial real estate market.


Retail properties range from stand-alone buildings and single-tenant buildings to large-scale shopping centers with numerous tenants. Demand within the retail space is driven by consumer spending habits and trends.

Retail properties are split into five categories:

  1. Malls: Range in size but generally include major department store anchors, inline retail, service, and restaurant tenants.
  2. Community & Neighborhood Centers: These centers include a mix of general merchandise or convenience-oriented tenants. Often “anchored” by a big box retailer or grocery store.
  3. Strip Centers: Focus on convenience tenants such as dry cleaners, nail salons, and quick places to eat.
  4. Power Centers: These centers are dominated by “big box” retailers with very few smaller tenants.
  5. Lifestyle Centers: The newer generation of open-air lifestyle retail strip centers have begun to replace larger enclosed malls. Usually feature upscale apparel and restaurants.


Similar to other commercial properties, office buildings come in a variety of shapes and sizes and are generally classified based on their height, location, and use.

Demand for office space growth significantly increases in regions with heavy office users like finance, insurance, or technology.

Low-Rise: < 7 Stories
Mid-Rise: 7-25 Stories
High-Rise: 25+ Stories


The Industrial sector provides practical and efficient space to businesses that prioritize function over form with a variety of uses ranging from manufacturing, storage, distribution of goods, and research and development.

The demand for this sector depends on the economic necessity, the more consumer spending, the greater need for industrial space.

The Industrial Sector is separated into three categories.

  1. Manufacturing: A facility used for assembly, conversion, or fabrication of raw or partially raw materials into products/goods. They can be classified for heavy or light industrial use.
  2. Warehouse: Used primarily for storage or distribution of goods or materials. These can include specialty facilities like cold storage as well.
  3. Flex/R&D: Industrial buildings are designed to give tenants flexibility in how they use the space. These hybrid facilities can be used for testing or research.

Multi-family assets account for one of the largest sectors in commercial real estate. With the number of renters increasing within the United States, the variety of apartment property offerings has expanded to fit any investor’s portfolio.

Student housing close to a major college or university campus has become a staple asset within multi-family and are designed to attract students with amenities, game rooms, and fitness centers.

Low-Rise / Garden Style: 2:4 Stories
Mid-Rise: 5-9 Stories
High-Rise: 10 Stories or higher

The main asset within hospitality are hotels. Hotels give themselves competitive advantages based on their amenities and services provided to their guests. Major flagship brands benefit from worldwide tourism as familiar, reputable brands that will provide consistent service across locations.

  1. Full-Service: High-end hotels provide the highest quality with the most guest services and amenities to be able to charge a premium price.
  2. Limited-Service: These properties are a tier below full-service hotels, but often still include the main amenities.
  3. Budget: These hotels provide guests the bare minimum to provide the best possible price.


While the categories listed above cover most commercial real estate investments. There are types of real estate that have specific and unique uses that it would be challenging to place in another category. These investment types could have specific layouts, renovations or purposes that limit the property’s use for only its intended purpose. Examples of special-purpose investments include but are not limited to, marinas, sports arenas, funeral homes, and service centers.