6 Things to Know About Investing in Commercial Real Estate

By Rachel Warren – Updated Sep 1, 2025 at 2:21 PM | Fact-checked by Frank Bass

Key Points

Industrial CRE sectors show strong demand, while multifamily and office sectors suffer from high vacancy rates.
Before investing, study local market conditions to understand supply and demand for CRE properties.
Market cycles and thorough due diligence are critical to mitigate risks in commercial real estate investment.

Commercial real estate (CRE) is an attractive investment class due to its consistent returns, passive income, and growth potential. CRE investing involves the purchase, development, or leasing of properties for business purposes to generate income or for other commercial activities. This sector of real estate investing is becoming increasingly popular as an alternative investment.

However, while CRE has the potential to be profitable, not all commercial investments are considered equal. Knowing when, what, and how to invest in commercial real estate is an essential component of success or failure. If you want to invest in CRE, here are six things you need to know before you get started.

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Newly developed commercial real estate office building. — Image source: Getty Images.

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The bottom line

Hopefully, these six things you need to know before investing in commercial real estate will help you identify profitable investments and guard against some potential setbacks, risks, and downsides.

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About the Author

Rachel Warren is a contributing Motley Fool stock market analyst covering pharmaceuticals, biotechnology, medical devices, information technology, and consumer goods. Prior to The Motley Fool, Rachel was a paralegal and legal administrator. She holds a bachelor’s degree in paralegal studies from Liberty University School of Law.

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