What is commercial real estate?

What is commercial real estate? In short, commercial real estate is any type of Chicago property that is involved with commerce. For example, storefronts, boutique retail shops, warehouses, and industrial buildings. You can even consider old firehouses and abandoned church’s as commercial real estate. The big question is, “is my rental property commercial real estate?” Since multi-flat apartment buildings generate commerce, they are considered commercial properties. However, they are also residential properties. One way to look at rental properties and commercial real estate is this: If a rental property has four or more rental units it is considered a commercial building. If there are three or fewer rental units, the building is considered residential.

Benefits of donating commercial real estate to a nonprofit.

Benefits of donating commercial real estate to a nonprofit. There are several benefits to the person donating commercial real estate to a nonprofit as well as the receiving charity. From tax incentives to improving the overall quality of Chicago’s neighborhoods. From donating warehouses and old factories to retail shops and large apartment buildings, donating real estate is a great way to improve your portfolio and do something that feels good. Below are just a few examples of how you can benefit from donating commercial real estate to a charity.

Eliminate the costs of ownership.

Eliminate the costs of ownership. Whenever you or your business own real estate that is left abandoned or vacant you carry a risk. Not only does that property still need to be kept up, but costs such as insurance, security, maintenance, and taxes are costly throughout the years, or years you own the property. Additionally, vacant properties attract animals, vermin, and people who trespass to use the real estate for other reasons. These issues can create a risk for you and the trespassers. By donating real estate, you no longer carry the burden of a vacant commercial property you no longer use or can’t afford to renovate.

Quick transaction.

Quick transaction. When donating commercial real estate to a charity through the Urban Renewal Project there are no fees, closing, or recording fees. You will need to pay for an independent appraisal which you can then use as tax incentives for your donation.

Tax deductions.

Tax deductions. The biggest tax benefits you receive for donating commercial real estate to charity include a tax deduction for the donated real estate and avoiding capital gains taxes. Additional benefits include no more property taxes, no more upkeep costs, and the ability to receive benefits before your property depreciates.

Eliminate a capital gains tax.

Eliminate a capital gains tax. Capital gains taxes are a tax on profits from the sale of a non-inventory asset. By donating real estate to a charity, you can avoid capital gains taxes for the donation of property.

Urban renewal improvements on vacant property.

Urban renewal improvements on vacant property. When you donate real estate to a 501c3 nonprofit organization you are both removing a risky commercial property from your ownership and transferring that property to an organization that can better utilize the real estate. When a charity receives a commercial property donation, they can either develop and use the property or sell it. In either case, the likelihood is much greater that your donated property will be renovated and improved. Renovating vacant Chicago real estate is one of the most important things that can be done for urban renewal.

Benefits of charitable commercial real estate giving.

Benefits of charitable commercial real estate giving. In order for a charity to exist it needs a way to generate money. And charities can choose from a number of fundraising activities for financial support. One popular fundraising program is the sale of donated property. Charities may also use donated property in their tax-exempt programs.

While the sale of charitable commercial real estate provides an excellent way for a 501c3 nonprofit to fundraise, commercial real estate can be used in a variety of beneficial ways. For example, warehousing and storage, additional indoor space for activities, space for a thrift store, and even the ability to lease the property where it is directly related to the charity.

Are you ready to donate commercial real estate to charity?

If you are interested in donating a commercial real estate or even a house or rental property, contact the Urban Renewal Project, we’d like to help you donate to a worthy cause in such a heartfelt way.