Commercial Properties
What Is Commercial Property?
Commercial property refers to real estate that is used solely for business or income-generating purposes — not for residential living. This includes buildings and land that host retail, office, industrial, or hospitality operations.
The key distinction? Unlike residential real estate (like single-family homes or condos), commercial properties are designed to generate profit through business activity or rent.
Common Types of Commercial Properties
Here’s a breakdown of the main categories you’ll find in the Seattle & Eastside market:
Retail
- Shopping centers, strip malls, storefronts
- Tenants include restaurants, boutiques, grocery stores
Office
- High-rise towers, suburban office parks, medical buildings
- Leases tend to be longer-term (3–10 years)
Industrial
- Warehouses, distribution hubs, flex spaces, manufacturing facilities
- Often located near ports, highways, and tech corridors
Hospitality
- Hotels, motels, short-term rentals (Airbnb-type assets with business licenses)
Mixed-Use
- Properties combining retail, office, and residential in one (very popular in urban developments)
Each type offers different benefits, risks, and tenant types. We help you choose what matches your financial goals.
Why Invest in Commercial Property?
Compared to residential real estate, commercial assets come with unique advantages:
Higher Income Potential
Commercial leases usually yield higher rental income. For example, a retail space may bring in significantly more monthly rent than a similarly sized apartment.
Longer Lease Terms
While residential leases typically last 12 months, commercial leases often span 3–10 years, offering greater income stability.
Triple Net (NNN) Leases
In some commercial setups, tenants cover property taxes, insurance, and maintenance — reducing your overhead and boosting cash flow.
Professional Tenants
Business tenants are generally more invested in maintaining the space, especially when it impacts their brand image and customer experience.
Value Based on Income
Commercial properties are often valued using the income approach, meaning you can force appreciation by increasing rent or reducing expenses — not just waiting for the market to rise.
Commercial vs. Residential Real Estate: Key Differences
| Feature | Residential | Commercial |
|---|---|---|
|
Lease Term |
~12 months |
3–10 years |
|
Tenant Type |
Individuals / families |
Businesses |
|
Income Volatility |
Higher (more turnover) |
Lower (longer leases) |
|
Value Drivers |
Comparable sales |
Net Operating Income (NOI) |
|
Financing |
Based on borrower |
Based on asset performance |
|
Entry Barrier |
Lower |
Higher, but scalable |
What to Know Before You Invest
Commercial real estate can offer excellent returns, but it also comes with a learning curve. Here are a few things to consider:
- Location is everything — traffic patterns, foot traffic, access to highways, and zoning rules all matter.
- Financial analysis is critical — NOI, cap rates, debt service coverage ratio (DSCR) will guide your decision.
- Lenders look at property performance — Not just your income or credit score.
- Regulations and permits — Seattle and King County have specific rules on use, signage, ADA compliance, and environmental impact.
- Property management — Commercial tenants have different needs than residential ones. You may need professional property management.
How Maggie Real Estate Group Supports Commercial Investors
Whether you’re new to commercial real estate or a seasoned investor looking for your next opportunity, we offer:
- Market analysis tailored to your business or investment goals
- Underwriting support for cap rate, NOI, cash-on-cash return, and DSCR
- Guidance on lease structure, negotiation, and risk mitigation
- Referrals to commercial lenders, attorneys, and inspectors
- Sourcing off-market and under-the-radar listings across Seattle, Bellevue, Kirkland, and beyond
- 1031 Exchange support when rolling from residential to commercial assets
Use Cases: Who Invests in Commercial Property?
- Doctors & Dentists: Buy their office space to stop paying rent
- Retailers & Franchisees: Want location control & asset growth
- Real Estate Investors: Seeking portfolio diversification & income
- Developers: Build or repurpose underutilized lots
- Immigrant Investors (EB-5 or otherwise): Combine real estate with business visa goals
Is Now a Good Time to Buy?
Despite headlines about office vacancies, not all commercial real estate is struggling. In fact:
- Industrial and warehouse space is in high demand due to e-commerce
- Medical and neighborhood retail remain resilient
- Zoning changes in Washington (like HB 1110) are creating new development opportunities
- Multi-tenant retail centers continue to perform in strong suburban markets
📍 Let’s look at your strategy and find the right commercial asset — whether that’s a $500K retail condo or a $5M industrial park.