Industrial real estate is a broad sector encompassing many business types and property uses. Locations of properties in this sector are determined more by access to transportation than by population density. Sites are located next to highway interchanges, along train routes, and near airports. However, being located within a close distance to a large labor force is also crucial because industrial parks and centers usually employ hundreds if not thousands of people. Industrial properties are typically leased, but some companies do choose to own their location. Rental rates are usually lower for these spaces because of the lower cost to construct the buildings. Industrial buildings have few office spaces and are mostly comprised of large open spaces either for equipment or storage.
Looking to the future
Industrial real estate is deeply tied to the strength of the US economy, especially in areas of manufacturing and distribution. When the economy slows, production will slow at these facilities and businesses will suffer. As oil and energy costs rise, transportation costs for materials to and from these industrial facilities will also rise. Industrial developers seek strategic locations in advance of distribution logistics as well as technology changes that prompt needs for data centers and yet to be discovered real estate solutions for technology innovations. Many manufacturing facilities are in the midst of redevelopment and repurposing as manufacturing processes evolve.
