A special purpose property is described as one that cannot simply be changed to another use and whose value and location are inextricably linked to a company’s operations.

Special purpose properties may be one-of-a-kind due to their distinct physical design and layout, limiting their use to the specific purpose for which they were constructed (thus the term “special purpose” or “limited market properties”).

What are Special Purpose Properties Used For?

A special purpose property is used to meet the specific business needs for which it was intended. As shown in the list above, special purpose characteristics support a wide range of corporate operations.

As a result, a special purpose property has limited use due to its unique building features, design, equipment, and property requirements to support the business organisation.

What are the Typical Characteristics of a Special-Purpose Property?

A typical attribute of a special purpose property is that it requires particular construction materials, specific building characteristics, or property requirements to function and cannot be simply converted to other purposes.

The distinctive properties in this real estate category feature a design that closely resembles the company’s operations. As a result, their economic life or sale is usually confined to the specific function or industry for which they were designed. Bowling alleys and funeral homes, for example, have limited applications in other industries.

What Are the Different Types of Special Purpose Real Estate?

Investors and lenders require a method for determining and categorising the quality of commercial property, much as they do for multifamily, office, retail, hospitality, and industrial properties. Special Purpose property is divided into three types based on its age, location, and quality.

What is a Class A Special Purpose Space?

Class A Special Purpose real estate includes the market’s newest, highest-quality Special Purpose properties, as well as the best facilities in important locations. Class A Special Purpose buildings are frequently leased by higher-income tenants, with low vacancy rates in high-traffic regions.

What is the Class B Special Purpose Space?

Class B Special Purpose Properties are slightly older and in less desirable locations than Class A Special Purpose Buildings. Class B assets are often still fantastic residences and investments; they just require a little more attention and are not in the finest locations.

Investors may regard Class B Special Purpose buildings as “value-add possibilities” since they can be modified to be more similar to Class A companies.

What is a Class C Special Purpose Space?

Buildings in the Class C Special Purpose category are often older, have delayed maintenance, and are not in an ideal location.

If the property is still in a strong or expanding location, investors generally regard Class C Special Purpose facilities as more significant “value-add prospects” than Class B Special Purpose space.

What are Some Other Names for Special Purpose Properties?

Special purpose properties are also known as special use property, special design property, and limited market property.

Where Can you Locate Special-purpose Property for Sale?

The simplest way to find special purpose property for sale is to search on commercial property sales listing websites like Crexi and LoopNet.