Everything You Need to Know About Industrial Lots
A huge change has had a profound impact on the way goods were produced and consumed, and it continues to influence the global economy to this day. And, because this sector is so important to the framework of society, the industrial lot is some of the most valuable property that you can own.
This change happened in the late 18th century when a number of important changes that would shape the global economy as you know it today. This period, known as the “industrial revolution,” saw a shift from rural and agricultural economies to those that were dominated by industry and manufacturing.
The introduction of improved transportation methods, like railroads and steam-powered vehicles, allowed producers to expand their consumer markets and ship their goods to different markets all around the globe. The industrial revolution gave rise to many new advancements and innovations, which in turn shaped the way businesses operate and cities are designed.
The increased need for factory workers drove urbanization and led to denser populations in cities. As cities expand, buildings are constructed higher and closer together to accommodate the demand for housing. This creates a synergistic relationship between city expansion and industrial technology development, where one fuels the other.
Over the last few centuries, production and transportation logistics for consumer goods have changed and become more complex. Today, industrial logistics play a big role in how businesses produce and transport goods.
Industrial Lot
When people think of real estate, they might picture their homes, offices, favorite retail store, or their favorite restaurants/bars. However, when people hear an “industrial lot,” they might picture giant, brick chimneys pumping out foul-smelling smoke or an assembly line at a factory with computer-automated machinery putting cars together.
Industrial real estate encompasses a wide range of property types that are used for various purposes. It is easy to see how industrial businesses affect everyday lives when you consider that almost every item in houses, offices or retail stores was either produced or stored in an industrial building at some point.
Toilet paper, food, clothing, and almost every other item people use on a daily basis goes through an industrial process before it reaches you. This shows the great amount of responsibility that these businesses have to ensure that products are safe and of high quality.
Location and Logistics
Industrial companies tend to seek out sites that offer the greatest profitability at the lowest cost. They do this by ensuring that production, overhead, and distribution costs are kept to a minimum. By working with experts in specific areas, industrial companies can make sure that they are getting the most out of their sites and maximizing their profits.
The efficiency of an industrial business has always been greatly impacted by its location. However, as e-commerce continues to grow, businesses are now placing a greater emphasis on logistics when searching for industrial real estate.
Distance and location are being increasingly paired with travel time and traffic congestion analysis to determine how logistically efficient a site is in terms of being able to receive goods from suppliers and then ship them to a consumer base. This allows for more accurate predictions of how long it will take for goods to arrive, which is crucial information for both businesses and consumers.
Types of Industrial Lot
Bulk warehouse
Bulk warehouses are large industrial properties that are typically in the 50,000-1,000,000+ square foot range. These properties are typically used for regional distribution of various types of products and require strong accessibility for trucks entering and exiting the highway systems.
Most bulk warehouses are located outside of metro areas because these usually have large footprints. However, some larger companies, such as Amazon, are starting to construct multi-story industrial warehouses to use less acreage.
Heavy manufacturing
Heavy industrial properties are often customized for the current user, making them difficult to sell to new owners. As a result, these types of properties are often owned by large national companies or local owner users.
If you find an opportunity to purchase a property that is already being used as a heavy manufacturing plant, it would be beneficial to investigate the opportunity further. The reason is, that tenants usually occupy these types of sites for long periods of time because it is not very convenient to relocate a large operation. So, if there is already a tenant in place, there is a higher chance they will stay for an extended period of time.
Cold storage
Cold storage and refrigeration warehousing is a type of storage specifically for perishable items that need to be kept at cool temperatures. These warehouses usually have special HVAC systems and insulation to make sure the temperature stays between 34 degrees and -10 degrees. They are often used as distribution centers for groceries.
Flex spaces
Flex warehouses are versatile industrial products that can be used for a variety of purposes. They often have office space attached to the warehouse, and they come in a range of sizes to accommodate businesses of all sizes.
Demand for Industrial Lot
E-commerce
E-commerce is booming as people are shifting their shopping preferences to online retailers. Companies like Amazon are able to ship their product directly to consumers in some metropolitan areas in a matter of hours.
As technology advances, more and more large companies are choosing to handle their operations internally, which is increasing the demand for industrial space. This is especially true for retailers, who often need space to store their inventory and ship orders. If you’re looking for a new industrial space, it’s important to consider the needs of your business and find a property that can accommodate your growth.
Key Takeaway
Industrial lots require lower maintenance than other types of commercial spaces. Businesses in this sector often sign long-term leases to maintain stability. This results in a steadier stream of income that can help pay down a mortgage on industrial property.