- Industrial real estate includes :
- All land and buildings either utilized or suited for industrial activities. Such activities are defined as:
- Production, Manufacturing, Assembly, Warehousing, Research, Light Storage, Distribution and some related Office requirements of tangible goods rather than service-related users.
- The broker wants to understand the definition to profile users for target marketing and for a cold-calling campaign.
- Discussion on the physical components of warehouse vs. office segregation in an industrial building
- Illustration of industrial building floorplan and components of a building for warehouse vs. office
2. General Rule for Industrial Users (20 mins)
- "Industry tries to select a site or building where the cost of production, overhead and distribution is at a minimum. The location will affect the greatest profit or the lowest costs."
- Economics of an industrial company
- Profit-margins and the expenses relevant to an industrial user
- The impact of real estate costs, rents and occupancy costs to the balance sheet of an industrial user
- Breakdown of other operating expenses to an industrial users
- Explanation of why industrial buildings have to be low cost facilities with low cost building materials
- Wholesale v. retail businesses and how it impacts decision for affordable industrial rents
3. The Design of an Industrial Building (25 mins)
- Percent of warehouse to office ratio
- Location of office in a building
- Location of a building to highway and rail and why it is important to lower real estate costs
- Intermodal transportation costs and the impact on industrial user
- Column spacing, dock location and ceiling height of a building that impacts rent and user's operations
- Physical characteristics that influence a tenant's decision for a building
4. Industrial Lease rates and Surprise Costs to a Tenant (20 mins)
- Gross Lease
- Definition of "triple net" lease
- Definition of operating expenses that may be reimbursed
- Operating vs. Capital expense responsibilities to a tenant
- Operating expenses of contention
- Review of an Annual Operating Data Sheet and possible operating expenses
- How does a landlord mechanically charge back reimburseables?
5. Review of the construction of an industrial building (40 mins)
- Construction slide show, powerpoint or equivalent of beginning to finish of an industrial building and the different components
- Construction items that a industrial broker needs knowledge when working with an industrial user
- Design items that are important to an end-user in making a real estate decision
"Industrial Handbook" by the Society of Industrial and Office Realtors
"Industrial Development" by Urban Land Institute
Annual Operating Data Sheet by CCIM Program
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