🏭 Industrial/Warehouse
Industrial properties are facilities that manufacture or store products or materials.
This can be heavy manufacturing, such as automotive factories, oil refineries, and steel mills, or light manufacturing, such as buildings that manufacture and assemble products on a much smaller scale (electronics, food packaging, clothing, etc.). This also includes distribution facilities and warehouses.
Onshoring of manufacturing
Online shopping needs a lot of these
Very, very low maintenance
Higher yield (rent/sqft)
Shortest lease for warehouses, but longest in the commercial space
Might require heavy utility and equipment upgrades for industrial uses
Higher lending costs (lower LTV)
Manufacturing
Property zoned for manufacturing is for businesses to produce goods. This can be heavy or light manufacturing. Land zoned for manufacturing is often intentionally placed far from residential neighborhoods, as residents may be frustrated by the noise and smells associated with manufacturing.
Warehouses
Whereas manufacturing properties are primarily used to produce goods, warehouses are primarily used to store and ship goods. The shipping component makes the location of a warehouse super important.
Ecommerce has recently scaled back since the pandemic
Loft Conversions
A loft building is a building of several floors with unobstructed floor space. The high ceilings of loft buildings offer tenants the ability to easily store materials and products.
Data Centers
A data center is a building that houses an organization's computing facilities, including servers, firewalls, routers, etc. The content you're reading right now? It's stored at your friendly Amazon Web Services data center.
Tips from Jack Kraseaeth
- Warehouse/Distribution generally 1-3 year leases, 5 being the longest
- They would expect TI or special equipment like AC for a longer lease, but you can get a loan for it
- Increase cap rate by 0.1% for each year for risky lease
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Requirements for 100k+ sqft
- 500 sqft of office or less
- As many dock doors as possible
- As tall as possible, 28 clear height or taller