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Commercial vs. Industrial Real Estate: Exploring New Opportunities

CEO Khai Intela

Are you looking for lucrative investment opportunities in the real estate market? While commercial real estate has always been an attractive choice, industrial real estate is now emerging as a promising sector. In this article,...

Are you looking for lucrative investment opportunities in the real estate market? While commercial real estate has always been an attractive choice, industrial real estate is now emerging as a promising sector. In this article, we delve into the world of industrial real estate, uncovering its potential and shedding light on its key characteristics.

Understanding Commercial Real Estate

Commercial real estate is a broad term encompassing various income-generating properties. These can include multifamily apartments, office buildings, hospitality properties, retail spaces, and, of course, industrial properties. Within each category, there are niche property types that offer unique investment opportunities.

Industrial Real Estate: A Vital Asset

Industrial real estate plays a crucial role in the nation's economy. It encompasses all lands and buildings that facilitate industrial activities such as production, manufacturing, assembly, warehousing, research, storage, and distribution of consumer goods. Although many people associate industrial real estate with traditional smokestack buildings, the sector is much more diverse.

Photo of historic bank safe door at the Trust Building in Downtown Los Angeles

Exploring Industrial Zoning

Industrial properties require specific zoning to accommodate their unique activities. These properties often feature high ceilings, strong floors, and multiple loading docks for efficient logistics. Historically, industrial properties were located on the outskirts of residential areas, but with the rise of e-commerce and direct-to-consumer business models, demand for industrial properties has skyrocketed.

The Relationship Between Commercial and Industrial Real Estate

It's essential to understand that industrial real estate falls under the umbrella of commercial real estate. Industrial properties, such as manufacturing facilities, warehousing centers, and distribution hubs, are considered commercial assets. The investment potential in industrial real estate lies in sectors such as warehousing, storage, and logistics facilities, catering to the growing demands of businesses.

Demystifying Industrial Zoning

Industrial zoning differs from commercial zoning in terms of lot size, setback requirements, noise regulations, parking considerations, and environmental factors. Industrial zoning allows for more spacious lots, creating distance between business operations and neighboring properties. Setback requirements ensure sufficient space for heavy machinery and truck traffic, as well as essential infrastructure. Noise restrictions and parking specifications are also crucial in maintaining harmony in industrial areas.

Examining Types of Industrial Zoning

Different municipalities have their own zoning codes, which define industrial zoning. Common types include dry cleaning or laundry services, data centers, manufacturing (heavy or light), moving and storage services, recycling facilities, and wholesale trade or distribution centers. It's important to familiarize yourself with the specific zoning regulations in your area to understand which types of industrial buildings are permitted.

The Significance of Industrial Zoning Building Codes

Building codes for industrial properties vary across jurisdictions. They typically cover egress requirements, fire suppression systems, minimum floor heights, and interior space finishings. Compliance with building codes ensures the safety and functionality of industrial properties.

Evaluating the Value of Industrial vs. Residential Land

The value of industrial land versus residential land depends on market conditions and the specific industrial activities in the area. For instance, areas with low land values may see large regional distribution centers command higher worth than neighboring residential properties. The demand for industrial warehousing and distribution centers, particularly in well-located areas, has attracted institutional investors seeking to diversify their portfolios.

Embracing the Industrial Real Estate Boom

Industrial real estate is no longer an overlooked asset class. The surge in e-commerce and the shift in consumer behavior have propelled the demand for industrial properties to unprecedented levels. Experts predict that industrial real estate will outperform office and retail sectors in the coming years.

Ready to explore the potential of industrial real estate investment? Contact us to learn more about our specialized approach and strategies for industrial property investments.

Note: All images and content are sourced from the original article "Commercial vs. Industrial Real Estate".

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