The North American Industry Classification System (NAICS) provides a standardized method for classifying business establishments. Within this system, a specific code designates entities primarily engaged in passively holding ownership of buildings or land. These entities may lease the real estate to others. An example would be a company whose main activity consists of owning an office building and renting out office space to various tenants.
Utilizing the appropriate classification is crucial for accurate economic data collection and analysis by government agencies. Furthermore, businesses may use it for market research, competitive benchmarking, and strategic planning. This classification assists in identifying potential investors, understanding industry trends, and complying with regulatory requirements, especially in matters relating to taxes and zoning.
