Industrial Commercial Real Estate

Industrial properties are used for a wide range of business activities, including manufacturing, high-tech, distribution and warehousing, and most are located outside of downtown corridors.

Depending on the needs of the potential tenant, the following could be deciding factors in choosing to lease one industrial space over the other:

  • large open floor plans
  • high ceilings
  • well-placed structural pieces
  • adequate electrical and utilities
  • waste disposal
  • truck access
  • availability of workforce
  • taxing jurisdiction
  • close proximity to logistics such as highways, waterways, railroads

Los Angeles County is the largest manufacturing base and boasts the largest brick and mortar industrial space in the country. In part due to the history of innovation and manufacturing in the area and the Los Angeles San Pedro harbor area. Industrial property nationwide is very dynamic and can be a great investment.

 

Categories of industrial space

There are quite a few sub-types of commercial industrial property, as they tend to be specially suited to the users’ needs. Here are just some of the sub-types:

 

Bulk

Bulk is the least sophisticated type of industrial space, which could simply be a building with four walls, floor and a ceiling. Where they lack in sophistication, bulk properties make up for it by more elaborate flooring and pavement outside. Bulk properties are built for function. Some are measured in cubic feet, to allow for tall equipment and other production needs. Paved aprons leading up to the loading docs allow the access to heavy transportation.

 

Office/Warehouse

Warehouse properties are typically large single tenant facilities with high ceilings and multiple loading docks. They are used for both short-term and long-term storage. Up to 5-25% of the total space can be devoted to the office space used to support the overall warehouse activity. Proximity to the main arteries is important for office/warehouse properties.

 

Office/Service

Similar to R&D facilities, these are expensive buildings, claiming top leasing dollar for their facilities, and leased to more sophisticated types of businesses with highly skilled workforce. Office/service are usually located in attractive areas with extensive landscaping and a good curb appeal.

 

Research and Development

Research and Development properties are large, single tenant properties, designed for the efficient innovation of new products. They are almost always built to suit – entitled land is first preleased to a qualified tenant, then financed before the improvements are constructed according to the tenants’ specifications. Security and proximity of skilled labor force are critical points. Another requirement is the quality of tenant improvements – from high tech chip manufacturing to pharmaceutical labs and other types of production, these facilities are required to follow certain standards of improvements and maintenance. Much of the Los Angeles R&D property is located in Thousand Oaks and Westlake Village.

 

Manufacturing

Manufacturing properties are very large spaces, designed to receive raw materials, manufacture, and distribute finished goods. They are very specialized to the type of manufacturing taking place. These are almost always built to suit a specific product or process and, as a result, could become obsolete. Availability of the skilled labor force and access to the main arteries is critical.

 

Multi-tenant industrial parks

Multi-tenant industrial, incubator parks, are planned developments, typically consisting of 5 – 50 units ranging in size from 1000 – 5000 square feet in one or more story buildings. This type of space attracts the smallest tenants of industrial properties – this is the space that entrepreneurs choose to lease as the next best choice after working in their garage. Depending on zoning, multi-tenant industrial properties could host a wide range of uses, from warehouse and distribution to engineering and light manufacturing. The tenant mix in these properties is one of the concerns, so landlords make sure the tenant uses are compatible across the property. The improvements are characterized as smaller spaces with 20% office and 80% warehouse with a rollup door in the back. With easy and affordable tenant improvements, these spaces work well at all phases of real estate cycle. During recovery and growth phases, innovators flock to these properties to build the next Apple, or HP, and when economy starts slowing down, larger companies choose industrial parks to downsize their businesses and cut down on their operating expenses.