1. Introduction of Industrial and its Definition (15 mins)
  • 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

Reference:

"Industrial Handbook" by the Society of Industrial and Office Realtors

"Industrial Development" by Urban Land Institute

Annual Operating Data Sheet by CCIM Program