| Industrial properties encompass a wide variety of property uses such as manufacturing, processing, storing, transporting, and research and development. Warehousing is included in the industrial classifications and most have some office component in the building. Office/warehouse properties are typically flexible, general-purpose buildings that can be adapted to a small-user's needs.
Industrial differs from other real estate types in the following ways:
- Height is third significant dimension.
- Utility is overriding factor.
- Little concern for the "public."
Industrial is typically categorized by use. Usually they are:
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Manufacturing properties include the heavy industrial segment. Auto making, textiles, steel, chemicals, and food processing are typical uses of such properties. Typically zero to five percent of the property is used for office space.
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Production lines that assemble components produced elsewhere are based in light industrial/assembly facilities. Some light manufacturing requiring limited raw materials and physical changes to the materials also might be conducted in such facilities. Space devoted to offices usually is less than 10 percent.
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Broadly defined to include wide variations in markets across the country. Research and development office/warehouse properties can have lab facilities, offices, warehouse facilities, or personal services such as carpentry or machine repair. Typically, each property allows a variable combination of office and other uses. The percentage of office space ranges from 20 percent to 100 percent, depending on the market and individual needs of the user. Research and development office facilities are generally used in high-technology markets. In other markets you will find office/warehouses of smaller size, with multiple tenants.
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Generally the least intense industrial use, warehouse and distribution facilities often are located in the lowest-priced land in older parts of town or in suburban fringes. Typically, similar to light industrial/assembly property, office use is limited to management tasks for the distribution or warehouse facility, or about 15 percent of total space.
Use our handy Industrial Property Checklist or our Industrial Property Improvements Checklist to help you evaluate industrial property.
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