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What Is Commercial Real Estate Development?

Posted on May 9, 2021May 25, 2021

Commercial real estate development refers to the process of building or buying a property that is used for business-related purposes. Such property is used as a workspace or for the manufacture of products rather than a place to live, which is called residential real estate. Normally commercial real estate is developed in order to attract business tenants that generate income through their activities.

Developing commercial real estate is typically subject to rules and regulations which determine where various business activities can be performed. At the very least land and buildings must be zoned for commercial use and this can depend on the state, county, or other bodies that have jurisdiction over a proposed site. This type of real estate, however, is attractive because of its relative scarcity, and while there may be significant construction or improvement costs associated with a commercial property it often has high leasing rates and long-term tenants.

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