COMMERCIAL REAL ESTATE INVESTING

Commercial real estate generally includes office, retail, industrial, multifamily above four units, hospitality, medical office, and self storage, among other specialized categories, each with its own leasing conventions and underwriting considerations.

Yes, when held for investment or business use. The like-kind standard for real property is broad, so an investor can exchange across asset classes, such as multifamily into industrial, without any requirement that the two properties share similar characteristics.

Underwriting generally centers on net operating income and the implied capitalization rate, but the durability of that income differs by asset class based on lease terms, tenant credit, and demand trends, such as structural headwinds in office space or strong demand tied to e-commerce in industrial and logistics property.

The broad like-kind standard for real property allows this kind of asset class shift within a tax-deferred exchange, letting an investor pursue a different risk profile, management intensity, or demand trend without a taxable sale first.

Multifamily property above four units is typically financed and underwritten through commercial rather than residential mortgage products, and it often benefits from more diversified tenant risk than a single tenant commercial asset.