Commercial real estate is a confusing space in the investment world. There are so many options to choose from that it’s easy to misunderstand market trends and make a less profitable investment. Traditionally, commercial real estate combines retail, industrial, office, land, and multifamily. Demand for one kind of real estate needn’t be the same as for another. In recent years, we have seen an upward trajectory in the demand for industrial spaces. Texas specifically has shown outstanding metrics. According to statistics, by the end of the 2020 calendar year, the U.S. totaled around 27.7 billion square feet of industrial real estate, of which 9.2% came out of Texas alone! The Texas industrial real estate market is booming and faring higher than other states in the country.
These metrics sound exciting and may spark the interest of any prospective investor. However, there is a big question that first needs answering – What kind of industrial real estate would be the best and most profitable option for an investor? To answer this, one must know the different kinds of industrial real estate in the current market. Industrial real estate can be broadly divided into three categories – manufacturing, logistics, and flex or R&D buildings. Knowing which is a better investment depends on your investment profile, investment amount, location, market demand, and more. This is precisely why having a professional on hand who is an expert in the industry is crucial.
Let’s take a closer look at the three kinds of industrial real estate:
Manufacturing Buildings
Manufacturing facilities are where goods are produced, held, and shipped. The raw materials used in the manufacturing process, as well as the machinery that is used to produce the products, are often stored on-site. The staff who operate the machinery and assist the production process are usually present during the day-to-day functioning of the manufacturing unit. These buildings can either be “freestanding” or part of a larger structure, but they typically have more power feeds, 10-30% of total square footage in office space, ground-level loading doors vs. truck-high loading doors (some may have both), fenced outside storage areas, and a warehouse clearance of 14 to 24 feet under-beam in the warehouse/plant area. These units often have more parking spots and greater office space.
Logistics Warehouses
In the past, logistics buildings were known as distribution warehouses. These are units responsible for staging, storing, and delivering products. In most cases, no manufacturing or assembly takes place on-site. As a result, the logistic warehouses have fewer employees and workers and almost no raw materials. Logistics buildings need truck-high loading, warehouse clearance of at least 24 feet, and a truck-turning radius of at least 130 feet. The ‘perfect’ logistic warehouse would be a fairly rectangular unit equipped with a “cross-dock” loading to minimize the distance between the loading and storage areas. Since these warehouses employ fewer staff members, office space premiums and parking spots are lessened. Typically, logistic warehouses feature a parking ratio of one parking place per 1,000 square feet, but these figures are, of course, subjective.
Flex Buildings
The advancement of technology in the late 1980s gave rise to a new kind of industrial real estate – flex buildings or research and development units. Flex buildings typically employ a large number of skilled workers and require ample parking, power, office percentage, and layout features. Office space is prioritized over the loading area, clear height in the warehouse, and outside yard storage. The “mezzanine second story” was created by R&D building developers to make it possible for a smaller lot to accommodate a larger building. All of these, however, are subjective claims. Every flex building is unique and includes features exclusive to its sector.
Investing in real estate can be a tricky business if not done correctly. Having an expert guide you through the process is not just advised but is essential for successful investment. Do not make real estate or other investment decisions by yourselves without the supervision of an advisor or broker. TC Global Commercial offers expert advice, consultation, representation, and more. Get in touch with industry experts and begin your investment journey toward successful wealth management.
Transforming Houston: Council Greenlights Progressive Changes for Affordable Housing and Pedestrian
Real Estate Articles / Nov 23, 2023
Revolutionizing Houston\'s Housing Landscape: City Council Approves Sweeping Changes for Affordable Housing and Pedestrian Safety
Rise In Population Is Causing This Real Estate Phenomenon To Take Place In Cypress, Texas!
Real Estate Articles / May 20, 2023
Population rise causes a rise in need for medical institutes, hospitals and other commercial real estate in Cypress, Texas.
US REAL ESTATE REMAINS TOP DRAW FOR FOREIGN INVESTORS
Real Estate Articles / Mar 02, 2019
The US continues to be the world\'s leading recipient of cross-border capital, and it has no plans of slowing down. During the first half of 2017 the United States attracted 19.8 billion U.S dollars from foreign investors.
Purchasing Commercial Real Estate? Consider These 5 Things Before You Buy
Real Estate Articles / Feb 09, 2019
Whether you are a seasoned investor, or you\'re researching for your first property there is always a certain risk factor that makes us hesitate before signing the dotted line.
How you can profit from investing in Texas wetlands
Real Estate Articles / Dec 21, 2022
Wetlands are profitable investments if done right. Texas has multiple real estate investment options, including wetlands and you can get great returns on investment from them.
Crypto is changing the real estate industry. Invest in real estate using crypto currency!
Real Estate Articles / Sep 01, 2022
With the economic inflation rising, the real estate and financial market is undergoing changes. Crypto currency is the new trend in real estate and in the investment world as more people are using crypto to invest in real estate.
Why Grocery-Anchored Real Estate Does Better!
Real Estate Articles / Feb 22, 2023
Grocery-anchored shopping centers are on the rise in the retail sector. They are the best investment in commercial real estate. It is low risk and long term.
Shopper & Consumer Trends Are Causing This Movement In Retail Real Estate
Real Estate Articles / Jun 19, 2023
The post-pandemic era brought several changes to the real estate market, specifically retail real estate and retail investment. Market trends for retail investment are on the rise. This is the right time to invest in real estate.
2023 Market Predictions in Commercial Real Estate
Real Estate Articles / Dec 28, 2022
2023 commercial real estate predictions are here. Find out which is the best investment opportunities are best for you. Make money with commercial real estate.
How is crypto and blockchain changing real estate business and money making?
Real Estate Articles / Oct 14, 2022
Cryptocurrency and blockchain technology is changing the real estate business in many ways. Real estate investing has started shifting to a digital and virtual space slowly.
