During the last recession, industrial real estate was hit hard. It took a while for it to recover, but it’s been improving steadily since then.
According to a report, industrial real estate sales for the first quarter of the year were almost $16 billion! Vacancy rates have also gone down to 5.1%, which is the lowest rate recorded in the economic history of the US.
Here are a few reasons why industrial real estate is on fire these days:
- The increase in demand for warehouses by online companies
- Low upfront capital requirement
- Less costly to own than other commercial real estate properties
- Low operation and maintenance costs
- Longer lease options, which increase the chances of predictable and stable cash flows for investors.
- Higher rental income
- Good potential for quality tenants
- The majority of the expenses are paid by tenants
However, before you start evaluating your financial position and looking for warehouses to buy, you might want to consider the following factors:
Proximity to Markets, Raw Materials, and Transportation:
No matter how amazing an industrial property is, if it’s in the middle of nowhere, it’s probably worthless. The first thing you need to do is to look for a property that is located in a geographically ideal area.
There should be easy access to major transportation routes such as highways and motor carrier services. Industrial buildings that are near sea, rail, and air transportations tend to have higher marketability and demand.
Similarly, the industrial property needs to be in close proximity to markets and sources of raw materials that are typical for industrial manufacturers.
The size and design of an industrial warehouse plays a crucial role in increasing its marketability. Look for specific layouts which have plenty of floor space and good ceiling height.
Also, look for an open floor plan which can be used by most manufacturers and companies. Small, cramped, and disproportionately distributed industrial buildings tend to limit the choice of tenants who would be interested in buying the property.
Prospective tenants are also interested in renting industrial properties that have room to grow. So, look for industrial properties that have plenty of nearby lands available for future expansions.
Consider The Investment And Returns:
Before you go looking for a good industrial real estate to invest in, do some market research. Find out the cost of various warehouses and other industrial properties and compare them to what you are willing to spend.
Evaluate each property for expected returns, the benefits of depreciation, and the projected increase in the intrinsic value. Do a complete analysis of renovation cost and expected sale price as well as mortgage value and value appreciation of the property.
If you aren’t sure where to invest your capital and which industrial property is likely to give a higher return on investment, get in touch with the commercial and industrial real estate experts at Macomb Commercial Real Estate. Our team of experienced real estate brokers can help you buy the ideal industrial Spaces for sale macomb which will increase your business bottom line and the potential profits.
Get in touch with us at 586-227-9515 today for a free consultation and discuss your buying options.