Commercial Real Estate Investing From A-Z Industrial Opportunities: Where Are They?
Why is there an opportunity for online lead generation within commercial real estate? What are some areas that you can be investing in an industrial that are showing very good solid returns and low vacancy rates? Max Fisher, an industrial broker with BRD Realty, shares his knowledge.
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Where do you think there is an opportunity for investing in the industrial market right now?
It's a tough time to invest in commercial real estate right now mostly because interest rates and the banking world are completely different and seller expectations are different today from one that where they were three years or two ago, but two deals that I've recently invested in, they're both land deals, and they're both infill sites. These are sites that are zoned industrial, but they also have the ability to build some retail. The first one was split up into four parcels to industrial and then to retail pads for drive-throughs or any other type of retail uses. So, one of those pads is in escrow now and the buyer has gone hard, that's done well. The other one, we bought for pretty cheap, because we bought it when the seller has it in escrow with the Self-Storage developer, and then the Self-Storage developer backed out. And then that was also during a time when the Fed kept raising rates in the economy seemed like it was going pretty well. So, I think like infill industrial land, and I'm also just a big believer in a Flex business park, small to medium bay, class B, class C type of industrial.
Is industrial, being overbuilt right now? Where do you see the lease rates going?
There are two different types of industrial products: small to medium bay and then there’s the bigger assets. The small to medium space really hasn’t been built so, I don’t think it’s being overbuilt. I think that there’s a supply issue and even in some instances, these business parks are being demolished and redeveloped for mixed use or other types of uses. But I do think in the bigger base, maybe in some other markets, some bigger markets, where there’s a lot of lands, and there’s a lot of spec development, possibly being overbuilt, but I’m very confident in business parks, and I don’t think they’re being overbuilt, and that’s fine, like Class B, Class C, industrial business parts.
What are some of the things that we should keep in mind as property owners to make sure that we put on the lease and some things that are really non-negotiable with regards to industrial?
Having space already clean and marketable for those prospects is most important. One of the things that we actually do is we know who that tenant wants more warehouse than an office. So, sometimes when a space comes available, and there’s more office build-out, just demo it out before you even take it out to market. Another key thing for industrial is if there’s some way that you can build some type of yar or industrial outdoor storage to complement that building, that’s a great value add to a property, you can even get higher rates and take some unused land and just create some more income that way. Overall, just creating a space that’s clean and marketable to your prospect with a mostly warehouse-less office is key.
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