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What Are the Different Types of Industrial Real Estate Properties?

by Steven Brown
real estate agent in Denver

Are you considering investing in an industrial real estate property in Denver?The industrial property offers greater diversity and more stability, ensuring long-term returns on your investment. Furthermore, industrial real estate investments give the highest rental yields, about 6% to 7.5%.

However, the sheer diversity of industrial properties can make you feel overwhelmed. Which is the best type of property to invest in? Which type of property generates higher rental yields or has more demand? In this regard, a real estate agent in Denver can guide you with the right advice to help make an informed investment decision.

Typically, industrial real estate properties can be of the following types:

  1. Manufacturing

At the basic level, manufacturing units are the ones that produce goods in bulk volumes and assemble them. These types of industrial buildings comprise less than 20% of office space and include loading/unloading trucks. In most cases, manufacturing plants require up to 10 feet of clearance.

Manufacturing plants can be of two types – light assembly and heavy manufacturing. The former involves assembling products, storing them, and shipping them directly to customers. Heavy manufacturing units produce heavy-duty materials and goods and therefore, these are spread over thousands of square feet. Heavy manufacturing requires powerful equipment and loading dock space.

These types of industrial properties may need complete renovation before you can rent them out to tenants, and therefore, involve hefty price tags. To understand if it is the right investment option for you, get professional brokerage services in Denver.

  1. Storage and Distribution

Perhaps one of the most popular types of industrial real estate investments is storage and distribution. These industrial buildings involve storing products and shipping them to customers – and therefore, the size of the building may differ depending on the type of goods stocked. While 80% of the space is assigned to storage, 20% of it is given to office space.

Primarily, there are three types of storage and distribution spaces:

  • General purpose warehouse: This type of industrial facility is much smaller in size and is geared towards the storage of goods and products. Location does not play an integral role here. It is mainly used to store products and then shipped to another location to facilitate distribution or purchase. An example is a cold storage facility.

  • Distribution warehouse: These types of industrial units are primarily used for distributing goods to customers. Since the shipping of goods is an integral function of distribution warehouses, location plays an important role here. Therefore, these are located near major transportation hubs or city center. A good example is the Amazon fulfillment center.
  1. Flex Space

Flex spaces are industrial properties that give their tenants flexibility in the way they can utilize the building. These comprise a mix of warehousing, office spaces, and areas to feature or test products. Some common examples are data centers, research & development, showrooms, etc.

Conclusion

Not sure which is the right type of industrial property to invest in? An experienced real estate agent in Denver will help you choose the best option based on your long-term investment goals.

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