The Benefits of Industrial Real Estate Investing

One significant attraction of owning or investing in industrial real estate is the ease of ownership. Investing in industrial real estate is a very different owner-experience than a 20-unit or more multifamily property. For example, the owner or investor is not accountable directly or indirectly (e.g., through a property manager) for rental payment collection from 20 separate residents each month or overseeing/initiating annual lease renewals. Industrial properties typically have one or a few tenants. This makes rent collection and releasing considerably simpler.

Nearly all industrial tenants have multi-year leases. These leases typically range from 3 to 10+ years with rent increases built in to the lease. Following the initial move-in, owners/investors practically have a hands-free investment with an excellent stream of passive income.

INSIGHT: Industrial assets require little in the way of build out. In fact, when one tenant moves out, the next can usually move in without engaging an owner in another build-out.

Finally, industrial real estate has a built-in exit strategy: numerous industrial tenants are eager to buy the structure from the property-owner. If business is profitable, tenants often rent the structure for many years. These types of tenants are sometimes referred to as “sticky” tenants because they stick around, and will often purchase the property from its owner.