Industrial Real Estate Options To Boost Your Investment Portfolio
There are several ways to invest in commercial property. For a passive portfolio, consider Real Estate Investment Trusts. If you are looking to purchase and manage individual properties, you will want to select the one that best meets your needs. Regardless of your commercial real estate investment plan, take the time to learn about the different industrial options available.
Bulk warehouses are the behemoth of commercial real estate. These facilities start at 50,000 square feet. Regional distribution centers can encompass over 100,000 square feet. You will find the most profitable properties outside of large metro areas. These facilities are close to major interstate highway systems. Parking lots and loading docks support large trucks.
Flex warehouses provide storage for several businesses, from smaller local distributors to larger regional suppliers. In addition to warehouse space, flex facilities typically include office space. Smaller companies can keep their warehouse operations close to their office space. Office parks are usually your best resource for flex facilities.
Cold Storage Buildings
Cold storage warehouses are customized to support cold storage. Grocery stores are the primary tenants because of food storage demands. Pharmaceutical companies or local restaurants may use these facilities. Cold storage warehouses are a niche market with a limited customer base. You can be successful if you take the time to develop a reputation for reliability.
Data centers provide storage for the servers of several different companies. These warehouses do not have much office space. Focusing your floor plan on data storage allows you to maximize your rental options. If you invest in a data center, look for specialized features, such as:
- Reliable power source, including backup generators
- Two or more fiber providers
- Comprehensive security systems
- Specialized HVAC systems
You may consider remodeling a warehouse to support manufacturing services for smaller businesses. As a commercial real estate investor, evaluate the cost of these upgrades compared to the potential rental income. Production facilities may need expanded electrical service, additional ductwork, dedicated ventilation, and specialized loading docks.
Investors may build a facility on vacant parcels zoned for commercial use. Other investors may limit the development of the land and use it for activities, such as:
- Storage Lots
- Parking Lots
Understanding the differences in industrial real estate can help you build a more robust financial portfolio. Take the time to learn the different types of commercial properties and find one or two that match your goals.