Real estate is a legal term that encompasses land along with anything
permanently affixed to it, such as buildings. Commercial real
estate may include office buildings, industrial property, medical
centers, hotels, and retail establishments and is intended to be operated
for profit, which may be in the form of capital gain or rental
income. Capital gain is any profit that results from the
appreciation of an asset from its purchase price. Realized capital
gains occur when the property is sold and returns more money than the
original purchase price. Unrealized capital gains occur when the
property is known to have appreciated in value, but the gain is only
potential because it has not yet been sold. Profit can also be
gained through rental income, whereby a contract known as a lease is made
for the temporary use of property and buildings owned by another person
or company.
Commercial Real Estate in a Growing City (Animation)
In most societies, a significant portion of the wealth is in the form of
real estate property. In advanced economies, individuals and small
companies are most likely to use a mortgage to purchase land and buildings
for commercial use. A mortgage is a bank loan for which the real
property itself is collateral. Banks are often willing to make
these loans because if the borrower does not make payments they can
foreclose, which means they can seize back the property and sell it to
regain their investment.
Commercial real estate has become a major area of business, and as such it
has grown into several different fields. Appraisal services conduct
professional evaluations of real property. Brokerages assist buyers
and sellers in transactions. Real Estate Development firms improve
land by adding or replacing buildings. Property management
companies manage property for its owner(s). Real Estate Marketing
services manage the sales side of the property business, and Relocation
Services assist in relocating people or businesses to a different
country. In the United States, the commercial real estate market
generates approximately $450 billion in sales each year. Clearly,
the business of commercial real estate is an ever-expanding investment
market that is here to stay!
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and invests in resources and technologies to provide its clients with innovative advice and bottom line results. www.CushmanWakefield.com