Industrial real estate is a broad category 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.
Information on this page provided courtesy of Cornell University Baker Program in Real Estate
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. It will be important for industrial facilities managers to become more efficient. As oil and energy costs rise, transportation costs for materials to and from these industrial facilities will also rise. Developers will be wise to find strategic locations for sites that will minimize transportation time and fuel consumption. Many manufacturing facilities are being closed as the United States transforms further into a service society. There will be opportunities to reposition obsolescent industrial sites into new and better uses.