INDUSTRIAL

PROPERTIES
CONSULTING
MARKET ANALYSIS FOR INDUSTRIAL PROPERTIES IS COMPLICATED BY
THREE FACTORS:

1. The market areas for these properties are more widely scattered

2. Demand is more limited

3. Supply is highly differentiated according to the operation of the enterprise

THE CONSULTANT MUST BE FAMILIAR WITH:

1. The characteristics of the immediate industrial districts and

2. The type of industry and complementary land uses found in the area.

3. Other essential information include local assessment rates, the principal type of ownership, and the level
recent sales activity of foreclosures.
 INDUSTRIAL DISTRICTS

The consultant must obtain pertinent data on the following
influence on land and building values in an industrial district:
1. The nature of the district
2. The labor supply
3. Transportation facilities
4. The economics of bringing in raw materials and distributing
finished products
5. The political climate
6. The availability of utilities and energy, and
7. The effect of environmental controls
Industrial districts range from heavy industries
(steel plants, foundries and chemical companies) to
house assembly and other “clean” operations. In most
urban areas, heavy and light industry districts are
established by zoning ordinances, which may limit uses
and place controls on air pollution, noise levels, and
outdoor operations.
Things to consider:
- Availability of labor
- Availability of materials
- Distribution facilities
- Environmental Impact
TYPES OF INDUSTRIAL PROPERTY

- General-purpose – are those that can be adapted to a wide range of alternative uses with minimal
expense and difficulty.

- Limited-purpose or special properties – have physical characteristics that restricts their use to a small
range of industrial activities.

- Single-purpose – are useful for only one industrial activity, such as chemical factories, dairies
(processing units), refineries, gain storage silos, and railroads yards. Some convertibility to alternative
uses is always possible at a price.
PROPERTY SITE/LOCATION SELECTION PROCEDURE
The selection of the appropriate site or finished facility for industrial site or location is a
common consulting situation

THE SITE SELECTION PROCEDURE

- Community Factors – in order to properly evaluate, the consultant should have a community survey for
the client.
- Site Considerations – of paramount importance to the client is the physical features of the site. If the
physical features of site do not meet the requirements for the given industrial use, the site must be
rejected immediately. Survey maybe conducted to determine the most important locational attributes
desired by industry.
- Single-tenant vs. Multi-tenant Buildings – the real estate consultant should examine carefully the many
factors determining a single-tenant vs. multi-tenant facility. Flexibility for expansion is a factor in
determining the choice between the two.
 INDUSTRIAL REAL ESTATE AS AN INVESTMENT

Three basic categories of equity investors in industrial property:

1. User-investor

2. Nonuser-investor

3. Combination of user and investor

The user-investor is the industrial tenant that chooses to own rather than lease a property.

The consultant must thoroughly consider the factors to both property use and investment analysis.