When you say what a building is in the form of sentences saying "this is the theatre", "that is the hotel", you are making a description. The sense of direction is given by the gesture of pointing at a place either on a map or out in the street to make clear what you mean by "this" or "that".
Please take a look again at the explanation and the examples; mind the use of "ahí"/"aquí"/"allá" with the verb "estar" and the use of "ése"/"esa"/"éste"/"ésta" with the verb "ser". The sentences with the demonstrative adverbs show where a place is, and the sentences with demonstrative pronouns describe what the place is.
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♪ ♫ ♪ Ain't it wonderful to be alive when the Rock'n'Roll plays... ♪ ♫ ♪
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