Industrial and Office Properties Overview

Industrial buildings designed to meet the specific needs of a single industry.

Industrial buildings are attractive investments for real estate developers because businesses in these buildings tend to be reliable tenants with long-term leases. Additionally, tenants often pay for most operating expenses.

Investor-owned office buildings are often leased with provisions that require tenants to pay operating expenses exceeding a certain amount per square foot.

Office leases for multi-tenant buildings often include provisions for 'operating expense stops' and 'tax stops', which limit the amount of operating expenses and property taxes that tenants are required to pay.

Office leases for multi-tenant buildings generally include rent escalation clauses, allowing for rent increases over time.

Loft buildings, originally designed for manufacturing, are often adaptable to other uses, such as residential or commercial.

Loft buildings are multi-story structures with various features, including wood or concrete frames and masonry exterior walls.

Many loft buildings are conveniently located near central business districts.

An industrial user might choose a location based on proximity to raw materials, fuel or power supplies, and their marketplace.

Incubator buildings are often smaller spaces designed for businesses in their early stages, expecting to grow and move to larger facilities.

Anchor tenants in shopping centers are larger businesses that attract customers to the center, creating traffic for smaller shops.

The demand for office space is influenced by the demand for services, as companies need space to operate and provide these services.

Demand for industrial space is often linked to the production of goods and can fluctuate based on changes in product demand.

Demand for industrial space is often influenced by long-term product projections, meaning manufacturers adjust their space requirements based on expected demand.

Changes in demand for industrial space can be more drastic than changes in demand for industrial goods. This is because the space needs are linked to production volume.

Industrial user: A company that uses industrial space to produce or distribute goods. Examples include manufacturing plants and distribution centers.

Derived demand: A type of demand that is influenced by the demand for something else. For example, the demand for industrial space is derived from the demand for the goods it produces.

Triple-net lease: A type of lease where the tenant is responsible for all operating expenses of the property. These costs can include property taxes, insurance, and maintenance.