What to Consider Before Investing in Industrial Properties
You can find industrial investment assets in a variety of sizes and purposes. Commercial and industrial assets could be a small industrial space to a huge distribution and logistics center.
The state of roads is a major consideration for investors in industrial property. Connectivity to cities is offered through motorways and freeways, which connect prospective tenants with ports and docks for freight. The economics, the closeness to infrastructure, and the interest rate are key properties market drivers.
Consider These Before Investing in Industrial Real Estate
If you decide to invest in Cushman & Wakefield NL real estate, it’s an important decision you shouldn’t take with care. Balances and checks are described below before buying during the due diligence process. There are nine points that you must not overlook:
1. Appraisal and Survey
To determine the value of St John’s real estate, you have to get a copy from a recent appraisal. The appraisal will also provide valuable information, including comparable information about the building.
The survey will help determine the inclusions in the purchase, which may differ from what the current owner of the building is aware of. Understanding the easements and restrictions can help determine if the property is appropriate to be used for its intended purpose.
2. Floor/Site Plan, Engineering and Environmental Reports
If possible, you can get a DVD that contains CAD drawings from CW. It can help you plan for the future requirements of space. Having engineering and environmental reports on hand is always a great source of knowledge and preserving the past.
3. Operating Expenses History
To calculate the property’s net operating profit, collect data from at least three years. The more reliable and accurate the information is, the more confident the cash flow forecasts you make will be.
4. Budget and Capital Improvements History
What is the Pro-forma for this year’s budget? Does the current owner plan to earn profits? Have the structures been maintained? Are there any areas that you need addressing right away?
5. Title Policies, Deeds, and All Contracts
Make sure the title is marketable and is free of any limitations. Get copies of every building contract, including vending services, overnight deliveries, and alarm monitoring.
6. Contracts and Certificate of Occupancy
It also includes unrecorded and registered agreements that grant rights over a property to any other person than the current owner either through an easement, a license, or any other method. Are there certificates of occupancy? And if not, does it need to be?
7. Building Permits and Taxes
Request copies of permits granted for major changes, additions, or repairs from the time the certificate of occupancy was issued.
Take proof of the most up-to-date tax bills for your property and any notices of upcoming or new assessments that affect the property. Learn about the tax burden once you’ve bought the property.
8. Service and Maintenance Contracts
Examine all maintenance and service contracts, and include contact information and numbers, including snow plowing, landscaping, cleaning, pest control, garbage disposal sprinkler systems, alarm or security systems.
9. Guarantees and Current Leases
Learn about the warranties for buildings, including ones for the roof and HVAC units and other things.
What is the average rent roll duration? Are you expected to find tenants immediately? What is the current rate for lease?
This list does not constitute advice on the law. However, reading these issues before deciding to invest in industrial properties may help you be in a better position to negotiate.