As a property type, industrial is quite basic and straightforward to understand and work with. It is commonly the first level of investment for many investors as they move away from residential property. That being said, it is also a property type that brokers and agents move to as they seek to initially grow market share and start their careers in the industry.
In most locations there will not be a stock shortage of property. There are always some established industrial property zones or precincts in many towns or cities where an agent or broker can focus to find new business. There are always some local businesses looking to move or expand into better locations or industrial buildings.
Industrial Property Advantages
So the advantages of industrial property are best summarised as:
- The complexity of lease documentation is generally basic and simple
- The industrial buildings usually contain only one tenant so there are no problems or concerns with tenant mix or property placement
- Property improvements are predictable and don’t vary too much from property to property
- The level of enquiry for renting and buying industrial is usually consistent and buoyant
- Terms of occupancy for an industrial building and tenant are simple and easy to negotiate
- Investment strategies are not hard to understand or difficult to set
- Rental strategies are not complex and follow industry standards for the area
- Tenant selection is easy given that local enquiry is usually active
- Industrial property as a segment of the industry will usually respond faster than other segments in a business upturn
So the industrial property segment is rewarding and active for most real estate brokers and agents. In saying that, some agents and brokers will eventually move away from industrial to focus their marketing and prospecting efforts into office buildings and retail properties. The size of a lease or sale transaction in the other property types can be larger (assuming the average property and transaction size) so care is required in selecting the right property segment to work in. Other agents however will stay with ‘industrial property’ and lift their focus to bigger and better buildings for greater levels of reward per transaction.
Establish Your Checklist Approach
If you are going to sell, lease, or manage industrial property, it pays to have a ‘checklist’ approach when it comes to inspecting and listing. In that way your coverage and investigation processes with new buildings that could be future or current listing stock.
So why do this? Over time you can then improve your checklist and refine it; that strategy can then help you with challenging properties and clients. It can help you establish yourself as the industry specialist for the location and on that basis help lift your listing conversions.
I did say earlier that the industrial property type is simple to understand; whilst that is the case there are plenty of things to review and investigate as part of taking on an industrial property listing.
Industrial Property Checklist for Sales and or Leasing
Here is a checklist (in no particular order) for those of us working with industrial property:
- Name and contact details of the people that you are working with
- Size and location of property
- Type of improvements within the buildings
- Environmental issues associated with the location and or the property
- Orders, notices, encumbrances, easements, and rights of way impacting the property
- Services and amenities available in the property and within the precinct
- Transport and road configurations for access
- Proximity to ports, airports, rail, and highways
- Zones of the property split into office, warehouse, showroom, hardstand, and loading zones
- Warehouse configuration and height
- Warehouse fire and safety code compliance
- Warehouse construction and design factors including clear span and columns
- Loading dock and zone capabilities
- Delivery doors and access doors height and width
- Access and circulation factors for deliveries and pickups
- Power supply to the property
- Air conditioning for office areas
- Security within the property and around the boundaries
- Current occupancy (if any)
- Lease terms and conditions (if occupied)
- Levels of market rental for the property and the local area
- Car parking capabilities on site
- Hardstand storage zones
- Room for occupancy expansion
- Signage potential on the building or at the frontage to the site
- Matters associated with risk or occupancy
You can add to the list as you see relevant for your location and particular property. As you can see from the checklist, an industrial property may be simple as a type of investment, but there are plenty of things to look into and review. If you use a list like this when inspecting and working with industrial property clients you will find that your professionalism will lift and that can help with your listing conversions.