Questions When Leasing Industrial Buildings (& Why It Matters to CRE)
Many potential commercial real estate (CRE) tenants and buyers are deciding to lease due to the current economic conditions and COVID restrictions on businesses. Now, more than ever, digital documentation, videos, and online tools are vital for the property, asset, and portfolio companies. Leasing agents and asset managers are struggling to provide tenants with quick access to building documents, answer questions, and interact with contractors or service providers.Leasing industrial space brings a new level of complexity to the commercial real estate industry because the answer to most questions asked by potential tenants and buyers is found in their ability to access building documentation. Knowing what the questions are for leasing industrial space helps CRE teams prepare for the answers and provide the right documentation at the right time.
Here are the most popular questions asked about leasing industrial buildings:
1. What are the sizes of the doors, stairs, hallways, and columns?
When seeking the right industrial building to lease, a primary concern needs to be the size of the small spaces. Many people focus on the large, open spaces because these are the primary center of activity and business; however, the reality is that moving machinery and equipment around is painful if the doors, stairs, hallways, and columns prevent easy to move-in and relocation, so it is important to measure these spaces.
2. How is the property zoned and approved for use?
Industrial buildings are used for warehouse storage, distribution centers, or manufacturing. The local government agencies decide on how a building is zoned and permitted for use depending on regional laws protecting the environment and citizens. It is important to inquire if the building is zoned and permitted for use for certain types of business activities. Although zoning cannot be easily changed, tenants can apply for a change of use permit with detailed building documentation to use a space that was previously categorized as a warehouse for manufacturing, for example.
3. Are there limits on electrical power?
Obviously, some types of businesses use more power than others. A warehouse, for example, will need less electricity than a brewery or data center. Working with a contractor to understand if business activities require more electricity, a certain type of current, plugs, or wiring can save money. A building drawing and floor plan review with a qualified contractor and/or construction company might be necessary for a permit.
4. How long are the lease terms? Would it be cheaper to buy?
Due to economic uncertainty, many industrial companies decided to lease building space instead of buy. While this sounds like the best choice for the short term, it might not make sense financially over the life of the lease. When the lease expires or building prices increase, finding and outfitting a new space, relocating machinery or goods, and changing operations are costly efforts. Working with a financial advisor and/or lawyer to review a lease saves money over time.
5. Are sprinklers already installed in the building appropriate for use?
Sprinklers may or may not be installed prior to move-in for industrial spaces; however, the sprinkler system needs to be checked by a qualified inspector using blueprints or drawings to determine if it needs an upgrade to be ready for this type of business. Whether protecting people, equipment, or property from fire hazards, not all sprinkler systems are the same.
6. Is the delivery platform appropriate for my business?
A loading dock is standard for warehouse, distribution, and manufacturing industrial space. Some businesses require excessive loading platforms for large equipment, cranes, or 18 wheelers. Understanding the delivery requirements of the building with the help of a contractor to review drawings for restrictions and/or costly construction alterations might be a game-changer.
7. Is the land around this building sufficient for traffic and delivery vehicles?
A walk around the building is common to look for structural and building issues. If a business will have traffic from delivery vehicles or customers, then asking about the amount of space around the building that is included for business use is important. Parked cars, delivery trucks, and trailers - as well as extra storage space for machinery or production materials - could quickly fill up space around the building and require additional construction.
8. Is historical documentation available for future licenses, inspections, and permits?
Archival documentation for industrial properties is rarely complete. From construction documents to floor plans, as time passes, these materials are scattered due to change of tenants, offline tracking and filing systems, and property management efforts. Making sure the documentation is ready for submission for licenses, permits, and inspections can save time and money after signing the lease.
The Benefits of PocketBuildings for Leasing Industrial Buildings
Asking these questions before leasing industrial space can save time and money down the road. Materials like floor plans, blueprints, and AutoCAD drawings are often necessary for permits, inspections, and construction before and after signing a lease for industrial building space. With images, videos, leases, and contracts, property managers, portfolio managers, leasing agents, and operations managers use this content to inform the buyer and streamline the leasing process.[caption id="attachment_9057" align="aligncenter" width="1907"]
PocketBuildings Smart Buildings Dashboard[/caption]The best way to keep the whole team on the same page and connected to the materials that instantly answer tenant questions is to use PocketBuildings to bundle, curate, and share building plans and media. With a built-in AutoCAD and Autodesk Revit viewer, team members can open drawings, take measurements of building features, and examine the space without buying an expensive license.[caption id="attachment_9060" align="aligncenter" width="981"]
Create your content bundles to share with stakeholders.[/caption]Giving permission to team members, contractors, and potential tenants to specific building materials mean you never have to surrender your valuable documents or send electronic documents to individuals. Check out PocketBuildings to find out more about how your team, your tenants, and your vendors save time and money - and close deals faster - by answering leasing questions about industrial space and providing documentation from one centralized hub.Click on the plans below to find out more about pricing or schedule a PocketBuildings demo with a Technology Consultant.[caption id="attachment_9048" align="aligncenter" width="1117"]
Sign up for PocketBuildings today! No credit card. No commitment.[/caption]