Commercial Real Estate Property Spotlight: Industrial Space
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Industrial Space? That is like big buildings and stuff right?
“Down in the West Texas’ town of El Paso….I fell in love with a Mexican girl…..” – Marty Robbins.
Greeting from the great city of El Paso, Texas. I grew up in El Paso….and have family here….so I come back a least a couple times a year. It is good to be here. I am here to visit family and friends as well as check up on my commercial real estate investments. A good size of my portfolio is in El Paso…not only because I am familiar this multi-cultural city…but because it is growing like crazy! Fort Bliss is benefiting from the base closures so the consolidation is making Fort Bliss a “mega” military base with over thirty thousand additional troops funneling in (not including their families) and government money to boot! But I digress.
So….today’s post is on the basics of industrial space. As most of us know, industrial real estate is getting “kicked in the teeth” as the market continues to drown in it’s own blood. This means we are seeing industrial prices at historic lows in some areas across the USA. A time to buy? Yes…but with strong caution. I my opinion….we have not seen anything yet….forget the “shoe falling off”….the whole foot is infected. I hope I am wrong…but it is going to get a lot uglier before we see some light.
Anyway…..
This is the fourth post in a series that will highlight the different types of properties available to investors. The posts are an overview of general information. As with all investments, you should properly research the opportunities to determine whether they fit your portfolio.
What are Industrial Spaces?
Industrial spaces are properties rented to tenants for the purposes of manufacturing, distribution, warehousing inventory ore 
research and development. The spaces can be either within an “industrial park” or a freestanding building. Like most commercial property, industrial spaces can be leased to a single tenant or multiple companies.
What Do I Need to Know About Investing In Industrial Spaces?
Industrial spaces can be a very efficient way to build your wealth, but you need to do your research to find the right opportunity for you.
• Many investors were snatching up industrial real estate as late as 2005, but like all sectors, this too has decreased. According to allbusiness.com, the industrial real estate sector has not experienced nearly the decline that other sectors have. It does point to the “credit crunch” as putting a hold on industrial space expansion.
• Industrial real estate usually is rented as “shell” space without walls or further cosmetic uses that are necessary for office space. This results in lower initial investments.
• Industrial buildings are generally located in an industrial-zoned section of the city. This generally means less insurance (expense).
• Most industrial tenants are long-term tenants that would prefer to stay in the same location because they may have large, costly equipment that is logistically difficult to move. This means that you have locked in tenants who will not move just based on a better rent structure four blocks down, which translates to continuous steady income.
What are the cons of industrial spaces?
Again, with any property, location is important. If the market is oversaturated or does not have the demand to support 
industrial property, it is not a wise investment. Financing can be difficult to obtain for certain investors, which means you may have to work harder to find creative ways to finance your acquisition.
In Conclusion
Industrial spaces are a common addition to many investment portfolios. If you are considering investing in an industrial space, take the time to tour other properties in the market and look at each building’s performance. And, as always, if you have questions, contact the experts at The Real Wealth Company.
Until next time……..rob
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1 Comments
July 9th, 2009 at 3:58 am
Just as it sounds, operating expenses are those costs associated with operating a commercial property. Commercial Property