| With co-ownership becoming popular with developers and manufacturers, there are many new players in the business. There is less risk. Buildings are going higher, up to 30’, with mezzanines becoming popular for office space.
Giving office workers birds eye views of the warehouses.
There are two types of industrial properties:
#1 Single tenant, which are small to large buildings that are usually owner occupied.
#2 Multi-tenant (industrial condos), which are owned by large and small investors (20,000-80,000sq’)
The zoning is determined by the municipality which is usually away from residential.
N1 – light industrial, multi-tenant
N2 – medium industrial (packaging), single & multi-tenant
N3 – heavy industrial (chemical & noise), single, usually 5-15 miles out of town
To buy industrial there are certain elements to look at:
Type – manufacturing or warehousing
Amount of people employed
Outside storage – look at municipal by-laws, some allow it and some don’t
Parking areas – Office space, rule of thumb, 5 parking spaces per 1000 sq’. Industrial space, rule of thumb, 1 parking space per 1000 sq’.
Railway areas – not much of a big player these days.
One of the most overlooked components of building an industrial building is having enough room for a 53’ trailer to back up. Many properties stay on the market abandoned for this reason.
Access to municipal services
Water pressure, minimum 2” water line
Waste disposal allocation
Power/electrical
Building permit
Restricted areas
Zoning by-laws
Size & height
Loading docks D/I & T/L
Column span (30×30) (30×45) – maneuverability for a forklift
Sprinkler system
Water supply & pressure
Adequate space: Office, warehousing, parking, loading & unloading
Land & Building Ratio
50,000sq’ of building = 100,000sq’ of land (2:1 ratio)
70,000sq’ of building with office space = 100,000sq’ of land (3:1 ratio)
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Advise
Hire a good lawyer to advise you on the contract agreement
Hire a good realtor who specializes in industrial sales and leases
Environmental study – make sure that the company specializes in the buildings industry
High quality industrial buildings are selling at a 6 CAP rate
Things to consider when buying
Expansion possibilities have a clause of first refusal (left or right of building), 90% of businesses grow
Zoning requirements (conforms to use)
Clean environment – Phase I soil test for land & building, very important
Check all servitudes
Who used it before, also check who your neighbours are
Get a building inspection
Conforms to building codes, no outstanding violations that have to be ratified (make sure that is a clause in the promise to purchase
Electrical and mechanical in good working order
Roof, tenant usually pays for repairs, landlord replacement
Access ramps for loading & unloading. Function & accessibility for all transport vehicles both large and small. 150 yard depth for loading
Floor weight bearing (load restrictions)
Floors need to be sealed
Sprinklers
Parking and public transport for employees
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on Wednesday, May 16th, 2007 at 8:10 pm and is filed under Industrial Properties.
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