Location, location, location. This is often used when talking about real estate, and for good reason. The right location can make or break a property investment.
Real estate investors are always on the lookout for new locations that offer the best potential for returns. In this blog post, we will discuss what makes a good location for industrial property investment and give you some tips on how to find these locations yourself!
Location is very important because the industrial property investment must be located in a place that is highly accessible to enable the products that are produced or manufactured can be brought in and out of the particular location.
Table of Contents
What Makes a Good Industrial Property Location?
Most of the time, the most desirable properties are in good, high-traffic areas that are easy to see, have good signage, and are easy to get in and out of. The property should also be located near other businesses in the same industry as this can create opportunities for collaboration and networking. Another important factor to consider is the availability of skilled labor in the area; This is important because it will determine how easy it is to find workers for your industrial property.
Additionally, a good industrial location will have access to major highways, railroads, and airports. It should also be located in an area with low crime rates and minimal pollution. Since businesses typically operate 24 hours a day, 365 days a year, an industrial property should also be close to residential areas so that employees can live nearby and have easy access to local services like grocery stores and restaurants.
What Makes a Good Market?
One of the most important things to consider when looking for good industrial property investment is the market that it’s in. A good market will have plenty of demand for your product or service and will be able to support your company’s growth over time.
But what else makes a good market? Here are some of the factors you should look at when determining whether or not a market is right for you:
Population density
A high population density means that there are more potential customers living nearby who could patronize your business. It also means there are more people to hire if you need additional help with staffing or customer service.
Economic growth rate
The higher the rate of economic growth in an area, the better off your business will be because there will be more people with money to spend on whatever goods or services you offer. A high economic growth rate also means that there’s room for many different types of businesses to thrive without stepping on each other’s toes too much — which can make it easier for new entrepreneurs to get started in such an area.
Accessibility
It’s important to consider how easy it will be for industrial tenants to access your property when deciding where to invest in industrial real estate investments. A property located on a busy highway with easy access from multiple routes may be better than another location just off the highway but only accessible from one direction. You also want to consider how easy it will be for customers and suppliers to access your site — especially if they’re shipping large items like machinery.
Affordability
Affordability is another key factor in choosing a good location; As they say, a good location is a good investment. But if it’s too expensive, then no one will use it and there won’t be any demand for your product or service. If they can’t afford it and they can’t get there easily due to accessibility issues, then they won’t buy from you and your business will fail because of poor location choice.
Employment Growth
Employment growth is another important factor when considering whether or not an industrial property will be valuable in the future. If there are few jobs available, then people may not be able to afford your products or services and thus will not purchase them from you. If there are plenty of jobs available, then more people will have money to spend on what you sell and thus you will sell more products or services than if there were fewer jobs available.
What Makes a Good Submarket?
In Investing in industrial real estate markets, you should also consider the submarket that it’s in. A submarket is a smaller division of a market and the strongest ones are evidenced by relative stability, a favorable business climate, and strong dining, shopping, and entertainment amenities.
The following are some factors to look for when determining whether or not a submarket is right for you:
Proximity to major highways
When looking at industrial property types, you want to make sure that it’s located near major highways so that tenants will have easy access to transportation. If your property is located too far from a highway, then tenants may not be willing to move there because it will be difficult for them to get to and from work.
Proximity to major airports
Another factor to consider when looking at an industrial property is its proximity to major airports. If your property is located near an airport, then tenants will have easy access to travel if they need to fly out for business meetings or conferences. This can be a major selling point for tenants who frequently travel for work.
Proximity to major cities
If your property is located near a major city, then tenants will have easy access to all the amenities that the city has to offer. This can be a major selling point for tenants who want to be close to the action.
Favorable Climate
If the climate is favorable, then tenants will be more likely to want to move there. A favorable climate means that the weather is not too hot or too cold and there is little chance of extreme weather conditions.
Amenities
When considering an industrial property investment, you should also consider the amenities in the surrounding area. If your property is located near restaurants, shopping, and entertainment, then tenants will have easy access to all the amenities they need. This can be a major selling point for tenants who want to be close to all the action.
What Makes a Good Property?
Now that you know what to look for in a good location, you need to know what to look for in a good property. The following are some factors to consider when looking for a good industrial property:
Parking
When looking at an industrial property, you want to make sure that there is plenty of parking available. If your property is located in an area with limited parking, then individuals may not be able to park their cars and this could deter them from moving there.
Traffic
You also want to make sure that the traffic in the area is not too heavy. If the traffic is too heavy, then individuals may not want to move there because it will be difficult for them to get to and from work.
Ingress and Egress
You want to make sure that it is easy to get in and out of. This means looking for things like dedicated turn lanes and signalized intersections to make it as easy as possible for individuals to come and go.
Visibility
When looking at an industrial property, you want to make sure that it is visible from the road. If your property is not visible from the road, then individuals may not be able to find it and this could deter them from moving there.
Class types of Industrial
According to their cost, value, quality, and facilities, commercial real estate properties are ranked as A, B, or C.
Class A Industrial
New or like-new buildings that are well-maintained with modern features and amenities. These buildings typically command the highest rents and lowest vacancy rates.
Class B Industrial
Older buildings that have been well-maintained, but may not have all the modern features and amenities of Class A buildings. These buildings typically have lower rents and higher vacancy rates.
Class C Industrial
Buildings that need major repair or renovation. These buildings typically have the lowest rents and highest vacancy rates.
Industrial Location And Logistics
The industrial sector is a critical part of the economy, providing the warehouse space and infrastructure needed to store and distribute goods. The industrial sector comprises a wide range of industries, from food and beverage production to pharmaceuticals and e-commerce fulfillment.
The following are some factors to consider when looking for a good location for an industrial property:
Proximity to Customers
When looking for a good location for industrial property, you want to make sure that it is close to your customers. This way, you can save on shipping costs and ensure that your products are delivered on time.
Proximity to Suppliers
When looking for a good location for industrial property, you also want to make sure that it is close to your suppliers. This way, you can reduce your inventory costs and get the raw materials you need promptly.
Proximity to Transportation Infrastructure
When looking for a good location for industrial property, you want to make sure that it is close to transportation infrastructure, such as highways, airports, and railroads. This way, you can reduce your shipping costs and get your products to market quickly.
When looking for a good industrial real estate investment, you want to consider the following factors: proximity to customers, suppliers, and transportation infrastructure; parking; traffic; ingress/egress; and visibility.
Types of Industrial Properties
There are 8 types of industrial properties:
Warehouse
A warehouse is a building used for storing goods. Warehouses are typically large buildings with ample space for loading and unloading trucks.
Heavy manufacturing
Heavy manufacturing refers to industries that use large amounts of machinery and equipment. Examples of heavy manufacturing industries include steel production and shipbuilding.
Light manufacturing
Light manufacturing refers to industries that use less machinery and equipment. Examples of light manufacturing industries include food and beverage production and electronics assembly.
Distribution Center
A distribution center is a building used for storing and distributing goods. Distribution centers are typically large buildings with ample space for loading and unloading trucks.
General-purpose warehouses
A general-purpose warehouse is a building used for storing goods. General-purpose warehouses are typically large buildings with ample space for loading and unloading trucks.
Truck terminal
A truck terminal is a facility used for loading and unloading trucks. Truck terminals are typically large facilities with ample space for parking and maneuvering trucks.
Data Center
A data center is a facility used for storing and processing data. Data centers are typically large facilities with ample space for computer equipment.
When looking for industrial property investment, you want to consider the type of property that best suits your needs.
Showrooms
Most manufacturers have a mix of office, warehouse, and showroom space, as well as showroom space. Most of the space is used to show off and sell things. Most people think of a car dealership when they think of a showcase, but there are many other businesses that need space to show off their products.
Foreign Investment in Industrial Real estate
The impact of foreign investment in industrial real estate has been nothing short of phenomenal. It has caused the industrial real estate market to surge and has helped many companies to grow their business.
The United States has always been a desirable location for companies seeking to invest in industrial real estate sector, but many other countries are looking to get in on the action. In today’s global economy, businesses and commercial real estate investors alike have more options than ever before when it comes to where they choose to do business.
What drives the demand for industrial properties?
The answer to this question is simple: businesses need industrial properties to store and distribute their goods. The demand for industrial spaces is driven by the needs of businesses.
Businesses have several options when it comes to choosing an industrial space. They can choose from a variety of types of properties, such as warehouses, distribution centers, or retail space. They can also choose from a variety of locations, such as the United States, Europe, or Asia.
The most important factor in choosing an industrial property is finding one that best suits the needs of your business. You want to find a property that is large enough to accommodate your business’s needs, but you also want to find one that is located in a desirable location.
Once you have found an industrial property that meets your needs, you can then focus on finding the best way to finance your investment. You will want to find a lender that offers the best terms and conditions for your loan.
You can also look into government programs that offer incentives for businesses to invest in industrial properties. These programs can help you to save money on your investment.
When you are ready to invest in industrial property, you want to make sure that you are getting the best possible deal. You can do this by shopping around and comparing different properties. You also want to make sure that you are getting the best possible financing for your investment.
What Are The Risks to be aware of?
Inflation risk
Inflation is the general trend of prices going up and people’s buying power going down over time. Since 2000, the inflation rate in the United States has been around 2% per year. So, it would be reasonable to plan for inflation of 2 percent every year in this market.
Political risk
if the government changes the laws or regulations regarding industrial property, it could have a negative impact on your investment.
liquidity risk
Real estate is a very hard-to-sell investment. An asset is liquid if it can be sold right away at its market value. If a property owner had to sell it by the end of the day, it would probably be for a price that was much lower than the market value. So, real estate isn’t as easy to sell as most other assets. The level of illiquidity depends on location, property type, and the stage of the market.
Location risk
The best type of property in the ideal location is required for real estate investment to succeed. If you invest in an industrial property that is not located in a desirable area, it could be difficult to find tenants or sell the property in the future.
Environmental risk
Specific environmental risks vary a bit with the region but may include problems such as asbestos and lead-based paints, radon or other hazardous chemicals, groundwater or soil contamination, wetlands, and protected wildlife. Environmental mitigation can be extremely expensive, so property owners should take the time to do their due diligence about potential sources of problems.
Investment opportunities in Los Angeles
The City of Los Angeles is one of the most desirable places to live in the world. It is a hub for business and culture, and it has a long history of being a great place to live and work. The real estate market in Los Angeles is very strong, and there are many opportunities for investors to make money.
Los Angeles has a very strong economy, and it is a great place to invest in real estate. The city has a large population, and there is a lot of demand for housing. The median home price in Los Angeles is $625,000, and the average rent for an apartment is $3000 per month.
There are many different types of properties available for investment in Los Angeles. There are single-family homes, condominiums, townhouses, and apartments. There are also commercial real estate properties, such as office buildings and retail space.
The market for industrial property is also very strong in Los Angeles. There is a lot of demand for industrial spaces, and the vacancy rate is very low. The average rent for industrial space in Los Angeles is $15.11 per square foot on average but it can definitely go higher.
Industrial real estate investing is getting popular, especially around LA. It’s easy to see why: commercial properties are usually larger than residential ones, so you can get more bang for your buck. And Industrial real estate has historically been a safer investment than residential property because it’s harder for potential tenants to walk away from their leases when times get tough.
Los Angeles is a great place to invest in real estate, and there are many different types of properties available for investment. The market for industrial property is very strong, and the vacancy rate is quite low. So, If you are looking for an investment property, Los Angeles is a great place to start your search.
Key Takeaways
Industrial property investment can be a great way to secure your financial future and provide stability for your business. However, not all industrial properties are created equal. It is important to do your research and find the right location that will offer you the most benefit.
When you are ready owning industrial property, there are a few things that you should keep in mind. You want to make sure that you are getting the best possible deal, and you also want to be aware of the risks involved. Inflation, political instability, and liquidity risk can all affect your investment. However, if you are willing to take on these risks, you should definitely invest in industrial property.
If you need help finding the best industrial property investment for your needs, please call or schedule a free consultation with me. I would be happy to assist you in making the best decision for your future.
