When they are planning to invest in commercial property, many people automatically focus on multi-family rentals or retail and office spaces. But there are some good reasons to look beyond these types of properties and instead consider purchasing warehouses. As an investment, a warehouse property can be much easier to maintain and keep rented than higher-maintenance options, like multifamily housing units or retail spaces that can require renovations or updates at the beginning of each new lease.
If you are interested in acquiring warehouses as part of your investment strategy, the following information can help you understand the benefits and provide information to help you select quality properties.
Get a good feeling for value
Warehouse properties are most valuable when they have the potential to fill a demonstrated need that already exists or one that is in the planning stages for the community or area where the building is located. Like other types of investment properties, prospective purchasers must also pay close attention to:
- the square footage
- any positive or negative features related to the site, such as access and security
- the most probable use of the structure
- overall condition of the structure
In most cases, warehouse investments that prove to be the most profitable are those that offer tenants a secure, well-maintained property with convenient access to major transportation routes, such as some combination of major highways, railways, sea ports, or airports.
Verify data before making an offer
Most warehouse properties calculate the asking price by using the square footage as a base point and then adjusting the price upwards or downwards based on condition, features, and other factors. When beginning to compare warehouses, prospective purchasers will first want to verify the actual square footage of the warehouse structure and use that information to help weed out warehouses that may not compare favorably with other properties of a similar size.
Use potential tenant information to help make purchase decisions
Another factor that should be considered when planning to invest in a commercial warehouse is whether you have identified one or more prospective tenants for the property. A warehouse property that has one or more reliable tenants ready and waiting to lease it may be much more valuable than a less expensive one that has experienced frequent vacancies,
Commercial investors who are just beginning to focus on warehouse properties are sure to have many questions. Developing a relationship with an experienced real estate professional is a great way to get answers to these questions plus valuable information about your local commercial real estate market. Contact a real estate agent for help with finding commercial properties for sale in your area.
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