How Industrial Real Estate Assets Are Increasing in Complexity

How leasing an industrial space is becoming more complex.

Recently, the industrial sector has performed the strongest out of all the commercial real estate asset types. However, while the success of this industry is widely publicized, many still have misconceptions about industrial real estate assets, especially when it comes to leasing. Here are some of the ways in which leasing an industrial space is becoming more complex.

  • Multi-Tenant Industrial Assets

One popular industrial real estate type is multi-tenant industrial buildings. In this format, big industrial buildings are divided into smaller spaces so that multiple tenants can operate within the space. On the tenant end, this is convenient because they do not have to pay for space that they don’t need. From the building owner’s standpoint, this is good because it introduces a degree of tenant diversity and flexibility. While a favored asset for both tenant and building owners, this type of layout does complicate the leasing process. Rather than a single leasing contract, leasing in a multi-tenant industrial building is more similar to leasing a shopping center.

  • Biotech and Data Centers

Spaces that are used for biotech or data centers have some very specific utility and maintenance needs. For instance, the average biotech building, or wet lab, requires considerable water and drainage access, direct exhaust vents, specialized piping for gases and liquids, multiple sinks, and heavy-duty heating and cooling systems. Because of these unique needs, leasing these types of spaces is far more complicated than it would be to lease a traditional industrial space.

  • Varied Uses for Flex Industrial Spaces

Shifting business models have changed how commercial real estate spaces are used. This is certainly true for industrial warehouse spaces. Now, warehouse tenants are becoming more creative with their space, introducing new office spaces and storefronts to their previous inventory storage and distribution center spaces. This new integration of space requires a leasing process more similar to leasing a mixed-use building than leasing a traditional industrial facility. As you would expect, this process becomes much more complicated for both tenant and building owner.

These are some of the ways in which leasing an industrial space is becoming more complex. Do you have additional questions regarding your industrial or commercial real estate needs? If so, contact us. We at California Commercial Realty Advisors, Inc. are ready to assist you today.

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