If you are currently investing or planning to invest in commercial real estate, here are just a few additional conditions for commercial real estate that you should read.
Clear Space
A clear span means no columns, messages, or anything else that might interfere with traffic. This applies to more specialized buildings, for example, at the airport. These buildings are not only designed for aircraft, but also for companies such as Emery Air Freight and UPS. They are interested in how quickly they can get into the building, get a package and pull it out of the building - no matter where it is in the warehouse. This means that they will look for clearer intermediate areas. This is a more expensive space due to farms. The greater the clarity, the more expensive the farm works, and the more equipment that must go into the building.
Advice:
• Some companies require a huge amount of transparent spans.
• If you do not understand the industry and the market, stay away from it.
If you find yourself in this special area of real estate, someone may ask you if you have buildings with columns every 20 feet and many clear gaps. They may even expect you to clear several columns, which can cause serious technical problems. Thus, if you are considering participating in a specialized product or a specialized industry, be careful.
At any time when you are in the warehouse arena, always consider these elements:
• Spacing between columns
• Bay depth
• Transparent span
Ceiling height
Today, people prefer higher ceiling heights, especially for use in pure form in storage space. This increases the cubic capacity, because the cheapest way is laying and shelving. If you can stack 20 feet high instead of 10 feet, it effectively doubles the living space, but does not double the cost.
Therefore, consider the height of the ceiling when you evaluate warehouses for purchase compared with other similar properties that you may consider. The higher the ceilings, the more attractive for certain types of tenants oriented to storage (just remember to point them out if you really have much higher ceilings than similar properties available for rent!).
Functional obsolescence
Some buildings are class B buildings on the day they are opened, because they do not match previous class A buildings. Class A buildings will not have functional obsolescence - in other words, nothing in this building is considered old-fashioned or obsolete. Most Class B buildings and Class C buildings have functional obsolescence. Functional obsolescence is not easy to determine. For example, if you enter a building and enter an elevator, you will immediately notice that a three foot by three foot elevator is a functional obsolescence. This claustrophobia and the novelty of the elevator were in order to have 40 years ago, but this is no longer acceptable.
When this office building was built, the functional obsolescence of this elevator was literally cast from steel. You are not returning or repairing this elevator to make it bigger, because it is impossible. This elevator shaft was built with concrete in an elevated position, so removing an elevator can cost as much as rebuilding. You can install a new elevator, which is more for big money, but you cannot make an elevator anymore. This is how you measure the functional obsolescence of a building, looking for obvious things, such as elevators that cannot be changed.
The study of the conditions of commercial real estate is not difficult. You just need to understand them, as they relate to the industry. Take the time to study them to help you become more knowledgeable in this area of real estate.
