What’s the Difference Between Commercial and Industrial Real Estate?
While often used interchangeably, "commercial" and "industrial" real estate refer to distinct categories of property — each serving different functions, attracting different tenants, and offering unique investment profiles. In this guide, we’ll break down the key differences, use cases, and opportunities in Brooklyn and beyond.
Understanding the Basics
What is Commercial Real Estate?
Commercial real estate (CRE) encompasses any property used for business purposes that generates income. This includes:
Office buildings
Retail spaces (e.g., stores, malls)
Multifamily apartment complexes (5+ units)
Hotels and hospitality
Industrial properties (a subset of CRE)
What is Industrial Real Estate?
Industrial real estate refers specifically to properties used for manufacturing, production, storage, and logistics. It includes:
Warehouses
Distribution centers
Light and heavy manufacturing facilities
Truck terminals
Flex space (hybrid office/warehouse)
Key Point: All industrial properties are commercial — but not all commercial properties are industrial.
Functional Differences Between Commercial & Industrial Real Estate
Property Layout & Infrastructure
Commercial buildings often prioritize aesthetics, foot traffic, and customer access.
Industrial properties prioritize utility: loading docks, ceiling height, zoning, truck access, and power capacity.
Location & Zoning
Commercial properties are typically found in high-visibility urban areas.
Industrial properties may be located in dedicated manufacturing or mixed-use zones — like Brooklyn’s M1, M2, and M3 districts.
Tenant Profile
Commercial tenants include retailers, office-based firms, service businesses.
Industrial tenants include logistics companies, manufacturers, and warehousing/distribution firms.
Market Dynamics in Brooklyn
Brooklyn’s diverse commercial zones include:
Retail corridors like Fulton Street and Bedford Ave
Office buildings in Downtown Brooklyn
Industrial clusters in Bushwick, East Williamsburg, Red Hook, and Sunset Park
Why Industrial Real Estate Is Booming in Brooklyn
Limited supply of functional industrial space
Surging demand for last-mile delivery
Lower tenant turnover compared to retail and office
Resilience during market downturns (especially during COVID-19)
Investment Comparison: Which Is Right for You?
Cap Rates & Returns
Industrial real estate often offers higher cap rates due to lower management overhead and longer lease terms.
Retail/office space can offer high returns but is more sensitive to economic cycles and market sentiment.
Maintenance & Operational Demands
Industrial: Simpler structures, fewer amenities to maintain
Office/Retail: Higher buildout and turnover costs
Tenant Risk & Stability
Industrial tenants often stay 5–10 years or more, providing stable income.
Office/retail leases may be shorter and more volatile due to consumer trends.
Real Estate Strategy for Businesses
Should Your Business Buy or Lease Industrial Space?
Findor helps businesses evaluate whether it’s smarter to lease long-term or invest in owner-occupied space. Key considerations include:
Growth plans
Available capital
Customization needs
Can I Convert Industrial to Commercial Use?
Some Brooklyn industrial zones allow for creative reuse or mixed-use redevelopment — but zoning restrictions apply. Findor navigates these complexities on your behalf.
Why Work with Findor?
At Findor, we specialize in industrial real estate across Brooklyn, NYC, and NJ. We guide clients through:
Sourcing industrial and flex properties
Zoning and permitted use evaluation
Leasing vs. acquisition analysis
Exit strategies and investment planning
"We thought we needed retail space. After working with Findor, we realized a warehouse-flex setup better supported our logistics business — and saved us thousands each month." — Brooklyn Business Owner
Final Word: Know the Difference to Maximize Value
Understanding the difference between industrial and broader commercial real estate can save money, align with your long-term goals, and help you find the right property faster. Whether you're investing or looking for a business home, Findor is your expert partner in Brooklyn industrial real estate.
Findor | Brooklyn’s Industrial Real Estate Experts
Serving Brooklyn, NYC, and New Jersey