estimates that 370 million square feet of new space is needed annually in the U.S. to meet industrial demand, totaling 1.8 billion through 2026. All of this is good news for indus- trial developers, and even better news for investors who already own industrial properties. Not all industrial sites are cre- ated equal, however. In the world of industrial real estate (i.e., buildings used for warehousing, distribution, and heavy equipment operations), the design of the building plays a crucial role in determining its utility—and utility determines value. So, if you are looking to
purchase or invest in an industrial offering, you should care about how it’s designed. The following list details 10 things to pay attention to when you evaluate an industrial investment opportunity. 1. CLEAR HEIGHT Clear height is the vertical distance from the floor surface to the lowest obstruction feature (e.g., beams, lights, or ducts). Clear height can limit or expand the building’s functionality and suitability for var- ious tenants. Heavy machinery and equipment may not be operational under low ceilings. But a wide range of tenants can fill a building with tall ceilings. For example, a
business that handles materials and storage will capitalize on the vertical space for storage. Over the last two decades, tenants have consistently preferred buildings with taller and taller clear heights. Your tenant base will shrink if you need to fill an older, shorter building. 2. FLOOR LOAD CAPACITY Floor load capacity is a measure of the weight a building’s floor can safely support without failure. Heavy machinery or equipment requires a high weight load to operate. Floor load capacity ensures worker safety, enables machinery to function, and provides flexibility for future use. Building codes often require a min- imum floor load. You will lose time and money if you need to reinforce a floor with steel and concrete to meet code or retrofit a space. 3. PLAIN OLD LOOKS A previous tenant or business may have tacked multiple additions onto an older industrial facility as they required more square footage. Sometimes, these additions can turn the building into a Frankenstein of sorts. The aesthetics of the property makes a difference in attracting tenants. They do not want to conduct business out of a building that would The spacing of columns within the building can impact the flexibility of the space. Columns may be needed to provide structural support and distribute weight. But buildings that have poor column design can restrict a tenant’s ability to operate equipment like forklifts and pallet jacks. Wider column spacing, or no columns (clear span), offer increased storage capacity and make the space more adaptable. repel their customers. 4. COLUMN SPACING
thinkrealty . com | 23
Made with FlippingBook Online newsletter