Investing in Industrial Properties - Warehouses

Presently, the real estate market for commercial and industrial properties is showing a great opportunity for serious investors, given that most of the current commercial properties can still be acquired below market pricing. For people who have the money to invest, possessing an excellent warehouse now and reselling it later will certainly stand a chance to make a good turnaround profit.

In the US, lots of companies which are formerly production based have shifted to import and distribution businesses. This is mainly because many manufacturing factories now have moved to overseas markets and the import volume is on the rise every year. This is one of the reasons why investing on commercial real estates or warehouses is as good as putting your money in residential properties.

Before you begin to hunt for the best property in your area, you will need to make sure that all of your selected warehouses should have features that are appealing and practical to most potential buyers. It is of course next to impossible to meet every buyer’s requirements, but as long as your property has all the key features, it will definitely attract a lot of interested buyers. Below are some of the important aspects that you will have to look into:

1) Clear height of the warehouse
This is the maximum height measured from the floor (a lowest point of the warehouse) to the highest point before reaching an obstruction, which in this case is the ceiling or anything hanging from the ceiling. Many new warehouses are built up with around 30 to 32 feet of clear height as compared to early production factories that has a significantly lower clear height which is in the range of 12 to 24 feet.

2) Loading dock
Loading and unloading can be done on either inside or outside of the warehouse. External docks are much preferred because the buyer will not have to create an additional internal area for the loading process that might cost them a lot more to own the warehouse.

3) Land area
No doubt the more land that comes with the property, the better the deal is. Extra land space can be used as an additional storage place for containers, or as a parking lot for employees. Additional land area also provides the ability to expand the building.

4) Office space
An office space or room is necessary in almost any kind of business. An office may normally take up about 5% to 10% of the building's total square footage. If the office is too small, the buyer may be required to spend more money expanding it, whereas an oversized office will caused difficulty for the buyer to judge whether or not it is worth purchasing this property with an unusable area.

5) Location
This golden rule still applies in today's industrial real estate market. As fuel prices increase, it has become crucial that a commercial property had to be located at the right place. If you are able to secure a warehouse that is near to expressways, it will greatly benefit your prospect buyer as it reduces transportation and logistic costs (due to shorter routes and faster travels) and that also creates a bigger impact and the ability to compete in their business.

According to industry experts, the labor and fuel costs can be as high as half of the cost used to operate a distribution center. Hence, for distribution company owners who like to save some money in this aspect, you can always have a fuel discussion with your staffs and drivers and ensure that they have a good driving habit, and also introduce the use of fuel cards in order to control expenses. If you are able to cope with the rising fuel prices, you can definitely cut down the cost to operate your facility.