Industrial real estate is a booming market these days. More and more businesses are moving into industrial parks and warehouses. As a result, the demand for agents who can help them find and negotiate deals has never been higher. If you’re looking to boost your career in real estate, it’s important to learn how to handle industrial deals. Here are some tips.
What is Industrial Real Estate, and Why Should Agents Care About It?
Industrial real estate includes any property used for manufacturing, production, storage, or distribution. Some of the most common types of industrial properties include:
- Manufacturing facilities
- Small to large warehouses
- Distribution centers
- Flex space
- Research and development labs
- Light industrial facilities
The industrial real estate market has been growing rapidly in recent years. This is due to e-commerce and businesses needing more space to store inventory and ship orders. A study by CBRE Research showed that 1.25 million square feet of space for distribution purposes is needed for every $1 billion of incremental e-commerce growth. In 2022, CBRE Research states that the market for industrial real estate will be quite robust.
As a result, there is a high demand for experienced agents handling industrial real estate deals. If you’re considering getting into the industrial real estate market, here are some things you need to know.
Understand Zoning Laws and Regulations
When it comes to industrial real estate, one of the products or services delivered needs to be manufactured, processed, or produced on the premises. The first thing you need to do when you’re thinking about representing a client in the market for industrial real estate is to research the zoning laws and regulations in the area where the property is located.
You must ensure that the property your client is interested in is zoned for industrial use. In some cases, you may need to get a variance or special permit for your client to be able to use the property for their business.
Ensure Safe and Advanced Electrical Systems
Industrial electrical systems are complex and can be dangerous if not properly installed and maintained. As an agent, you need to be aware of the electrical system in any industrial property you’re showing to potential buyers or tenants. You should also make sure that the system is up to date and meets all safety codes and regulations.
In addition, many industrial businesses require a lot of power for their operations. As a result, you need to make sure that the property has an electrical system that can handle the load. Otherwise, your client may need to upgrade the system.
If so, ensure that your client will work with a reputable and fully licensed industrial electrical services contractor that can set up a complete system based on the client’s needs and meet industry standards and codes. Among the things that must be provided, as needed, are:
- Energy Efficient Interior and Exterior Lighting Systems
- Lighting Control Systems
- Computer/Data Processing Power Systems
- Transient Voltage Surge Suppressor (TVSS) Systems
- Uninterruptible Power Supply Systems
- High & Low Voltage Distribution Systems
- HVAC Direct Digital Controls (DDC) Systems
- Energy Management Systems
- Building Management Systems
- Motor Control Centers
- Security, Fire, & Access Control Systems
- Emergency And Standby Power Generating Systems
- 24 Hour Emergency Service
- Explosion Proof Installations
- Solar or Photovoltaic Systems, if preferred
Be Prepared to Negotiate
When it comes to industrial real estate, the negotiation process is often more complex than with other types of properties. There are a lot of different factors that need to be taken into account, such as:
- The size of the property
- The location of the property
- The condition of the property
- The type of business that will be using the property
- The zoning laws and regulations in the area
All of these factors will impact the price of the property and the terms of the lease or sale. As a result, it’s important to be prepared to negotiate on behalf of your client. You need to be able to understand their needs and requirements, as well as the market conditions, in order to get the best deal for them.
Learn All Aspects of the Industrial Real Estate Market
As an agent, you need to be aware of the different types of properties that are available in the market, as well as the different players who are involved in the market. The industrial real estate market is made up of a lot of different players, from developers and landlords to brokers and investors. It’s important to know these so that you can better understand how the market works and what your role is in it.
You also need to understand the process of how industrial real estate deals are typically structured. This includes the different types of leases and purchase contracts that are used. In addition, you need to be familiar with the due diligence process and the environmental impact assessment process. These are both critical steps in any industrial real estate transaction.
By understanding all aspects of the market, you’ll be better prepared to represent your clients and get them the best possible deal.
By being prepared with all the things listed above, you’re well on your way to becoming a top agent in the industrial real estate market. Just remember to always keep your clients’ best interests in mind, and you’ll be sure to succeed.