As we have shown throughout this series, the variety of Asset Classes to be found in Commercial Real Estate is numerous, providing buyers many choices.
We will finish discussing the Leisure Asset Class, and move onto the other Key Asset Classes:
- Hotels (See Part 4), Restaurants (See Part 5), Self-Storage, and Special Purpose and other nonresidential properties.
Self-storage is a sector of the real estate market that has continued to evolve in the past decade. Self-storage facilities vary in size, quality and construction. While some properties have been designed and built specifically for self-storage, others have been converted from prior uses as warehouses or empty big box retail.
Properties can be one-story with drive-up access as well as multi-story that offer access via elevators and internal hallways, and feature climate and humidity-controlled space as well as high-tech security systems. Some facilities also offer specialty storage for boats, vehicles, electronics, documents, etc…
Self-storage is divided into one of 4 classifications:
- Drive Up / Outdoor Bay: First generation self-storage developments were usually this type. Features:
- Rows of storage buildings with outdoor roll up doors – accessed by vehicle
- Offer minimal security – usually padlocks and on-premises video cameras, and
- Are single-story in height
- Typically the least expensive to rent
- Climate-controlled: Climate and humidity controlled spaces have become increasingly popular. Features:
- Prevents stored items (clothing or furniture) from becoming musty and moldy, and
- Documents from being destroyed by mildew
- Specialty storage: As the name implies, these properties cater to specialty storage needs. Features:
- All or part of a facility may be dedicated to storing special items
- Specialty items may include boats, cars, documents, wine, art, etc.
- Mixed-use Storage: These facilities boost income by including other uses and services. Features:
- May include retail or office space for lease
- Truck-rentals and paraphernalia, and
- Pack-and-ship services
Outside of the Key Asset classes, there are plenty of other types of Commercial Real Estate that investors buy, build and own. Some of these properties are known as Special Purpose Commercial Real Estate, and include examples like Car Washes, Theme Parks, Bowling Alleys, Marinas, Theaters, Funeral Homes, Community Centers, Churches, and so on.
We’ve covered the Healthcare and Leisure Asset Classes, and will present more Key Asset Classes in Part 7.