Knowing commercial industrial property basics is knowledge one should definitely have before investing. Learning about the different types of commercial industrial properties is key to making wise investment choices in this arena. Different types of commercial industrial property include the following:
- Bulk Warehouse- Very little or no office
- Office Warehouse- Less than 3-5% office
- Office Service-Typically ground height to bring trucks in and out of a building
- Freestanding- Single tenant
- Multi-tenant- Multiple tenants
- Large manufacturing- Very specialized and tend to be owned by occupant
- R & D I Flex- Warehousing people who rent out office space with easily movable walls in a warehouse situation. This phenomenon has slowly come from California across country and by the time they get to some states, it is often illegal
- Industrial Park- Not a building, but land that usually needs to be re-zoned and developed
NOTE: Some of these we will focus on in this manual more than others, because they are more appropriate and easier to break into for the kinds of students who would be purchasing this course. Bulk Warehouse Bulk warehouses are usually the larger warehouses that you see. Normally, a bulk warehouse is single tenant as opposed to multi-tenant. The standard bulk warehouse is usually 5% to 10% office space for running the company office, but the rest of the building is basically warehouse. If you invest in small individual buildings, they will be relatively inexpensive to buy or build and easy to rent.
Office Warehouse An office warehouse is a great place to start commercial real estate investing, if:
- You’re going to be investing in warehouse space
- You want to become involved with warehousing and the warehouse type of business. In this instance, let’s say you’re building an office warehouse.
- Your first step would be to review zoning and any other legal issues.
Most counties only allow a specific footprint that is the actual area on which the building sits, which takes into account environmental impacts associated with constructing the store. This may include any related site characteristics, such as a transportation footprint, operation footprint, or the waste footprint. There may be other zoning restrictions, such as the percentage of land that can be built upon, versus what percentage must remain unused. In our case study example, you will be allowed a footprint for this property of 12,000 square feet. This is calculated as a percentage of the total square footage that you’re buying. So, you’re going to develop a building with 12 units of 1,000 square foot units. The building will be an office warehouse.
Normally, you would probably design your building with roll-up doors at the front. Your office space is about 10% of the overall floor space. So, with a 1,000 square foot unit, that calculates into 100 square feet of office space. You want to build 100 square feet of office and one bathroom, with drywall in the office area. This is a steel building that costs $40 a square foot, which is very inexpensive.