Investing Risks of Industrial Real Estate

The major risk connected with investing in industrial real estate is vacancy. Single tenants predominantly occupy industrial buildings. If that tenant vacates the building, it can take two to six months, sometimes longer, to lease the property again. During that interim, the property-owner/investor has substantial carrying expenses (e.g., mortgage, taxes, insurance, utilities, etc.).

The best way to lessen this risk is for the owner or investor to be extremely familiar with the local industrial marketplace, becoming educated on all local industrial players. Working with a broker specializing in industrial properties can also shorten the vacancy times as they are full time students of their local market.