What counts as commercial real estate
Commercial real estate is property used for a business instead of a home. It's bought, sold and leased with longer contracts, more paperwork and more checking up front than a house. Most of it falls into five groups:
Retail
Storefronts, strip centers, restaurants and service shops like salons and barbershops.
Office
Professional and medical offices, from one room to a whole building.
Industrial
Warehouses, shop buildings, manufacturing and distribution space.
Land
Lots and acreage for a business to build on.
Mixed use
One building with more than one use, like shops downstairs and apartments upstairs.
What it looks like in the Shoals
Downtowns. Court Street in Florence, Montgomery Avenue in Sheffield and Main Street in Tuscumbia are lined with older storefront buildings. Florence is a designated Main Street Alabama community, and the Downtown Florence Alliance works on its downtown. Older buildings can need more work before a new business opens, so plan for inspections and permits.
Main roads. Avalon Avenue and Woodward Avenue in Muscle Shoals and Highway 72 through Florence and Killen carry a lot of the area's shopping centers, restaurants and service businesses.
Industrial parks. The Shoals Economic Development Authority (SEDA) recruits industry and builds speculative buildings. Its parks include the Shoals Research Airpark, the Florence-Lauderdale Industrial Park and the Barton Riverfront Industrial Park. You can browse SEDA's available sites and buildings.
What's coming.
- Hadrian says its plant in Cherokee will support up to 1,000 jobs when fully running. More in my Hadrian guide.
- Virginia Transformer announced a 600,000 square foot plant at the Shoals Research Airpark in Colbert County, with about 1,100 jobs at full production and operations planned for January 2028 (announced May 19, 2026).
- West Village, on the former Eliza Coffee Memorial Hospital site in Florence, plans a 12,400 square foot grocery store, more than 19,000 square feet of retail and commercial space, and 78 apartments (announced June 24, 2026).
- The Barton Riverfront Industrial Park received more than $3 million in state SEEDS funding to prepare a 131 acre site (April 2026).
Sources: Main Street Alabama; SEDA; Virginia Transformer, May 19, 2026; West Village, June 24, 2026; Made in Alabama, April 2026. Announced plans can change.
Buying or leasing
Leasing takes less cash up front and less long term commitment, and you follow the lease and the landlord's rules. Buying gives you control of the building, takes a bigger down payment, and makes the upkeep and property taxes yours.
Commercial leases are longer and more negotiated than apartment leases. In a triple net (NNN) lease, the tenant pays the property taxes, building insurance and maintenance on top of rent. In a gross lease, the rent covers most of those. Have an attorney review any commercial lease before you sign it.
Before you buy or lease, check these
1. Zoning, in writing
Zoning decides what kind of business can operate at an address. Only the city can tell you whether your business is allowed there, and a past tenant doing something similar doesn't settle it. Call with the address and exactly what you'll do there, and get the answer in writing before you sign.
Outside city limits, call the county to ask what rules apply. In Florence, buildings in a historic district go through the Historic Preservation Commission's design review before exterior changes. Ask the Building Department whether yours is in one.
2. Business license and certificate of occupancy
Florence's new business checklist says to confirm zoning first and that a certificate of occupancy is required for a business license. Tuscumbia notes that zoning clearance, a health review or a fire inspection may be needed before a license is issued. Food businesses also need a health department permit.
3. Environmental history
Former gas stations, dry cleaners, auto shops and industrial sites can carry contamination, and under federal law a new owner can end up responsible for cleanup. A Phase I environmental site assessment, done to the ASTM E1527-21 standard, meets EPA's All Appropriate Inquiries rule and can help protect a buyer. I recommend one before buying any commercial property.
4. The building itself
Get a commercial inspection, a survey and a title search. Ask about the roof, HVAC, electrical capacity, parking, signs and accessibility, and what upgrades your business would need before it can open.
5. Property taxes
In Alabama, commercial property is Class II and is assessed at 20% of its value, twice the 10% for an owner occupied home. Local millage rates by town are on my property tax page.
Sources: city pages linked above; EPA; Alabama Department of Revenue.
Paying for it
Many small businesses use SBA backed loans through a bank. An SBA 7(a) loan goes up to $5 million and can be used to buy or improve real estate. An SBA 504 loan offers long term, fixed rate financing for major fixed assets, up to $5.5 million. With SBA loans, the business generally has to occupy at least 51% of an existing building, or 60% of new construction (13 CFR 120.131). A lender can tell you which one fits.
Local help for small businesses:
- UNA Small Business Development Center: one on one advising and training at no charge, serving Lauderdale and Colbert counties
- Shoals Business Incubator in Florence: startup support, including a shared commercial kitchen
- SCORE Alabama: volunteer business mentors
- Shoals Chamber of Commerce: networking and business events
How I help
I'll help you figure out what you need, find space, set up showings, ask the right questions and negotiate the deal. For zoning, legal, environmental and tax answers, I'll point you to the people who give them in writing: the city, your attorney, your lender and your accountant. If a deal calls for a commercial specialist, I'll bring one in.
Common questions
What is commercial real estate?
Property used for a business instead of a home: stores, restaurants, offices, warehouses, shop buildings and land for a business. It is bought, sold and leased differently from a house, usually with longer contracts and more checking before you sign.
Can I open my kind of business in a certain building?
Only the city can answer that. Call the zoning office for that city with the address and exactly what the business will do, and get the answer in writing before you buy or sign a lease. A building that housed one kind of business before does not mean a new one is allowed.
What is a triple net (NNN) lease?
A lease where the tenant pays the property taxes, building insurance and maintenance on top of the rent. In a gross lease, the rent covers most of those costs. Always have an attorney review a commercial lease before you sign it.
What is a Phase I environmental report?
A review of a property's history and condition to look for contamination, done to the ASTM E1527-21 standard. EPA recognizes it as meeting its All Appropriate Inquiries rule, which can help protect a buyer from federal cleanup liability.
Is commercial property taxed differently in Alabama?
Yes. Commercial property is Class II and is assessed at 20% of its value. An owner occupied home is Class III, assessed at 10%. At the same value and millage rate, a commercial property pays about twice the property tax of an owner occupied home.
Do you help with commercial leases and sales?
Yes. Corey helps you find space, set up showings, ask the right questions and negotiate. Legal, zoning, environmental and tax questions go to the people who answer them in writing: the city, your attorney, your lender and your accountant.
General information, not legal, tax, zoning, environmental or lending advice. Nothing on this page means any use is allowed at any property. Confirm with the city, your attorney and your lender. Updated September 30, 2026.