What Is Commercial Real Estate (CRE) and How Does It Work?

Commercial real estate (CRE) is a property that is used solely for commercial purposes or to offer a workspace, as opposed to residential real estate, which is utilized for living purposes. Commercial real estate is frequently leased to tenants for the purpose of conducting income-generating operations. This vast category of real estate can range from a single storefront to a large shopping mall.

Retailers of all kinds—office space, hotels and resorts, strip malls, restaurants, and healthcare facilities—all fall under the category of commercial real estate.

Important Takeaways

  • Commercial real estate refers to properties that are used primarily for business or to generate money.

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Buying an investment property is most probably an effective way of making money and attaining financial independence. As a real estate investor, you may find yourself in a tax loophole when buying a new real estate before selling your current one. However, real estate investments have opened doors to amazing and profitable opportunities.

One advantage of investing in real estate over other properties or assets is that you can decide to exchange the real estate for another in a process known as reverse 1031 exchange. This is done without paying any taxes that apply to the increase in the value real estate value.

The reverse 1031 exchange is a tax deferring strategy used by real estate investors when buying a new property before selling the one they…

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