Real Estate

Land and any permanent structures or natural resources attached to it. There are many different types of real estate assets, from apartments and homes to offices, farms, data centers and warehouses. Investing in real estate includes purchasing a home, rental property or land. Indirect investment in real estate can be made via Real Estate Investment Trusts (REITs) or through a pooled real estate investment.

Deeper Dive on Real Estate Property Types

• Entertainment: A variety of property types, from sports stadiums to movie theaters, theme parks, concert venues and casinos. 
• Industrial/Logistics: Properties specifically designed to support efficient supply chains with purpose-built structures for storage, order fulfillment and distribution. The growth of e-commerce, coupled with consumer expectations for fast delivery, has created strong demand for industrial/logistics real estate. These facilities range from general warehouses to specialized buildings designed for temperature-controlled storage for perishable foods or properties licensed for handling hazardous materials. 
• Land: The base for all real estate, including undeveloped property and vacant land, as well as land used for agricultural purposes and farming. Developers purchase land to build structures or properties and may rezone land to increase density and value.
• Life Sciences: Properties that serve both traditional pharma and biotech firms, from research through development and manufacturing. Life sciences properties are highly complex and specialized buildings that can command rents significantly higher than standard office or manufacturing space. Properties can include research facilities combining office and laboratory space, manufacturing facilities and science parks, or campuses serving a variety of tenants.
• Net Lease: An agreement where the tenant pays rent and at least some part of the facility’s operating costs. Net lease properties tend to have high-quality tenants with long-term leases, simplifying management. 
  • Single net lease: Tenant pays rent and property tax. 
  • Double net lease: Tenant pays rent, property tax and insurance. 
  • Triple net lease: Tenant pays rent, property tax, insurance, and maintenance. 
  • Absolute triple net lease (or bonded lease): Tenant pays rent and all operating expenses.
• Mixed Use: Properties that combine multiple uses in a single development, such as a building with ground floor retail and a mix of office space and residential units on the upper floors. Mixed use properties seek to deliver strong long-term performance and higher returns for investors by creating all-encompassing communities where people can live, work and play. 
• Office: Business properties that are typically categorized by quality and type and are organized into three main categories: Class A, B and C.
  • Class A buildings are relatively new or recently renovated properties in prime locations. Also known in the real estate industry as trophy assets, these buildings tend to be premier properties that have market-leading amenities and are situated in strong markets. These buildings have high-quality construction and finishes, low maintenance costs, high-paying tenants and high occupancy rates. 
  • Class B comprises somewhat older properties located in good neighborhoods, with average rents. These may require some repair and renovation. 
  • Class C offices are usually more than 20 years old, tend to be located in less desirable areas with below-average rents and are often in need of substantial repair and renovation.
• Office buildings are also categorized by their height profile: low-rise, mid-rise, and high-rise.
  • Low-rise buildings have 1-3 floors and are often located outside the city center or in suburban areas. 
  • Mid-rise buildings are larger buildings with up to 24 floors, typically located in or near downtown centers. 
  • High-rise buildings are skyscrapers in urban centers that appeal to major corporations. Finally, office parks are clusters of office buildings in park-like settings.
• Rental Housing: Residential spaces that include single family (individual, standalone residences), townhouses/condominiums (individual units, usually within a larger residential structure, that may share common areas and amenities), high-rise apartment buildings, student housing, senior housing and affordable housing.
• Retail: One of the most varied types of commercial real estate, ranging from single-tenant stores and convenience centers to large shopping centers. Most include parking spaces, and many include “pads” that host individual tenants, such as banks, large specialty stores or restaurants.
• Storage: A real estate sector comprising everything from self-service storage facilities for individual consumers to industrial outdoor storage (typically uncovered, multi-acre lots used to park commercial vehicles, heavy equipment and construction materials).