Key Factors To Consider When Buying Industrial Real Estate

Industrial real estate properties may not be as glamorous as retail properties, but with lowest vacancy levels in three decades and hitting record net occupancy gains, it is proving to be a silent winner.

While buying Industrial Real Estate, it is important to keep the next buyer in mind. In other words, making sure the features of the property appeal as many potential clients as possible is essential. Having said that, it is also noteworthy to realize that you can’t meet every potential buyers’ needs.

Here’s a list of important key factors to consider when buying industrial real estate –

Location

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This golden key factor tops our list and applies even more as fuel prices climb. It is critical for you as a buyer to have a facility that is close to expressways that will keep your transportation and logistics down.

As fuel prices climb up, having a facility in the right location makes a major impact on the business’ ability to compete in the market. According to the logistics industry experts, labor and fuel costs of distribution centers can account for 50% of the costs of operating a facility. Check for latest gse Leasing price as well.

Docking

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There are two different types of docks that industrial buildings in Hereford could have – internal and external.

Internal docks are usually seen at older facilities where the dock allows the truck to reach the dock area, and the dock doors thereby protect the product from the elements. The disadvantage of internal docks is that you have to pay for the square foot in the dock area in operating expenses, purchase price and real estate taxes.

External docks, on the other hand, have the dock doors flush with the building external walls. External docks have become the standard for buildings today as they have seals around the door dock that keeps the hot/ cold air from entering the building. They also eliminate the cost of internal docks.

Column Spacing

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As the builders respond to an increase in the demand for space, column spacing has become important to provide the customers with more efficient distribution space. Facilities are now being built with larger column spacing. These new facilities provide more room for the product to be stored for loading/ unloading trucks.

Land

The more the land, the better the property. So, keep in mind these factors –

  • Car Parking –

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Car parking is not just important for residential properties but also for manufacturing companies that have many more employees than in a warehouse. Typically new warehouses don’t have as good as parking space than older production facilities.

  • Outside Storage –

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There is a huge demand for shipping container storage in both manufacturing and distribution facilities. If you buy land with outside storage, you will have an advantage over competing industrial buildings when you sell.

  • Building Expansion –

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Having land to expand your building is what interests most buyers. So, this becomes a little more obvious.

Labor Supply

source: https://www.economist.com

When companies relocate to nicer buildings in better communities, they only experience significant losses in their labour force. All the gains they make in real estate are lost in productivity. So, the factor of the labour force is particularly important where the next buyer will probably be a production company.

Office Space

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About 5-10% of the industrial building’s total space is used as office space. The percentage of the area dedicated to the office is critical as it will account how many users can use the building. Less office space can force you to add space in the building thereby adding costs to the acquisition for the buyer. On the other hand, industrial buildings that have much office space can make it difficult for buyers to justify purchasing the space they can’t use.

These are the key features that you should consider before buying industrial real estate. The stronger your building is in each of these areas, the more is its value.

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