Eleven (11) Value Indicators For Industrial Buildings

Whether you are an investor looking to acquire an industrial building, a user in need of a warehouse facility to meet your space needs or an owner attempting to competitively price your manufacturing property, there are several value indicators you need to be aware of. The following are eleven (11) indicators to be considered when reviewing properties:
1. Location, location, location: It is often referred to as the three most important features in analyzing commercial properties but probably not as important when assessing industrial buildings. Within the Greater Los Angeles Submarket the difference in location may be cause for an adjustment of 10 – 25% in a property’s value versus retail or office which could be upwards of a 50 – 100% adjustment.
2. Freeway Proximity: Shipping and receiving is often a critical component in running an industrial business. While there is not a significant increase Real Estate Agent Advertising Examples in value for immediate proximity to the freeway you will see values discounted if the user has to travel in excess of three miles for freeway access.
3. Construction Type: Concrete or masonry block buildings typically command higher values than metal or Frame & Stucco buildings. Concrete buildings tend to be more secure and require less maintenance.
4. Dock Height: Dock-height buildings are those buildings with a raised floor area of 48″. These buildings are more costly to build but typically command higher values than do ground level buildings. The dock height buildings tend to be in greater demand by industrial users as they allow for the larger trucks to load and unload at a quicker pace than do grade level buildings.
5. Clear Height: Clear height or ceiling height is measured at the lowest interior point under the ceiling. If the building has fire protection sprinklers you typically cannot stack product Commercial Property Price Index Indonesia within 2′ of the sparkler heads. The higher ceilings allow you to rack and stack more product. Increased cubic footage should be considered when assessing the building value.
6. Site Coverage: The amount of land in comparison to the total building or site coverage will significantly influence the value of an industrial building. Traditional you see a site cover of 50% or two feet of land for every one foot of building. This will allow enough land area for landscaping, car parking, and truck access. If the building has a higher coverage than 50% then the value should be discounted, if less coverage than 50% the overall value should be increased.
7. Loading: If the building is dock-height, you should have one loading position for every 10,000 SF of building; commonly referred to as the door to floor ratio. A higher ratio of 1/10,000 SF adds to the efficiency of the building and will result in an increased value. If you have less than 1/10,000 SF (example 2 loading positions for a 100,000 SF building) then it becomes very inefficient to load and unload, thus reducing its demand and value in today’s market.
8. Image: Newer or refurbished buildings command higher values. The buildings image can be improved with landscaping, painting, storefront entry, window treatments, and slurry coating.
9. Visibility: Buildings located on major four lane streets that are considered highly visible with retail potential command higher property values.
10. Access: It is important that industrial buildings are situated on the lot that allows for truck maneuvering and access. If a truck is forced to back in off the street to access the property this can diminish the value of the property.
11. Conforming Area: Industrial buildings located in areas where there is a mixed use (for example next to a residential development) will see lower property values than those in conforming areas. There is perceived crime and restrictions on hours of operation when located next to residential.
These items are not intended to be a complete list of value indicators used by appraisers, however, when assessing the value of an industrial building, these adjustment factors should be carefully considered. When in doubt, consult your local commercial/industrial broker who works the market your property is located in.

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