Exploring the Finer Points of Industrial Properties in Austin
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
The gears of industry look a lot different in 2022 compared to 1900. We’ve come a long way through technology, but that doesn’t mean that industry isn’t a vital part of the greater economy. Studying industrial property is just as important within the CRE framework as it is to look into something classic like multifamily.
In fact, examining new asset types unlocks new opportunities. In that spirit, we decided to dig a little more into industrial properties for their potential within the greater marketplace.
Commercial real estate enthusiasts benefit from examining more than one asset class, as well as looking at what industrial applications could be beneficial in their local and regional markets.
Austin, TX Continues to Showcase a Kaleidoscope of CRE Opportunities
Industry and Austin, TX go hand in hand; while the city is known for its high-tech vibe, regular industry still plays a strong role in the local economy.
In fact, there were some interesting acquisitions in Q4 2021 as well as early this year that should give CRE enthusiasts a brief view into the great opportunities available.
Sentinel Uses Syndication for Exponential Results
Sentinel Net Lease picked up an office building in Austin for $10.6 million, designed for value-add opportunities. While it isn’t purely industrial, office spaces can always convert to other more industrial functions or host light industrial tasks.
The company indicated that they would look for a high-quality tenant, but that doesn’t mean that they can’t modify the property to attract an industrial-minded tenant, of course. Or they could eventually sell the property as an exit strategy, and a new buyer could run with the idea.
The beauty of commercial real estate at its core is that its’ immensely flexible; sometimes, we just need to catch up.
A Few Comments About Syndication
Sentinel’s acquisition strategy caught out attention; syndication is definitely getting more attention lately. People looking to avoid taking on more risk than what they can handle while still getting to tap into bigger opportunities for development should look into syndication.
Simply put, syndication is about building a network where everyone is contributing to the deal, spreading out the investment as well as the risk. It goes without saying that everyone in the syndicate should profit from the deal in question.
Industrial opportunities are great syndication opportunities because they’re fairly easy to explain to interested members of the syndicate.
Opportunities that are easy to explain yield the best results in terms of raising capital. If you’ve wanted to join a syndicate or even build your own to go after deals, industrial properties represent an interesting opportunity to present.
Realterm Embraces Final Mile Logistics
Last month, Realterm acquired a final mile warehouse in Austin, a 48,686 square-foot distribution center that is perfectly located. The building features not just industrial space but also office space, generous trailer parking, 20 loading positions, and a truck repair bay. This is definitely a very versatile property that is sure to become a strong ROI contender.
A Closer Look at Final Mile Logistics
Final mile logistics is a huge topic, with a lot of moving parts. To sum it up, final mile delivery involves looking at the last few steps for a package to go into the hands of the person that purchased it in the first place.
Figuring out final mile delivery logistics is a hot topic, and it makes sense that there are now strategic real estate purchases to address speeding up the time of delivery.
Will this be the best commercial real estate for everyone? No, because freight does require special handling, and it takes up a lot of manpower and fuel. However, becoming the property owner and letting the right tenant
Great Examples of Industrial Properties
Forget car factories and heavy manufacturing. While those two facilities are great industrial property examples, it goes further than that. When it comes to looking at industrial property for sale in Austin, TX, here are some examples of what you might run into in the listings:
- Temperature-controlled facilities. Food, beverage, and even certain medicines must be stored at certain temperatures while waiting for distribution channels.
- Last-mile delivery centers. The post-pandemic era hasn’t slowed customer demand for shipped items.
- Data centers and other high-tech facilities. Data and document storage needs are projected to grow even higher as the years pass.
- Light, agile manufacturing. In this category, think 3d printing vs. traditional fabrication methods.
It’s time to rethink what we know about industrial properties and start looking at how they can fit into the greater commercial real estate blueprint. It may not be the most familiar segment of the industry, but it can yield some awesome benefits after conducting proper research.
Take Full Advantage of Industrial Properties
Thinking differently about industrial properties is important in order to pick up new opportunities. For example, instead of seeing the space as a blank page, imagine it furnished for the right tenant.
Just like at the supermarket, sometimes we pick up items because they’re convenient, even if they’re the more premium option. Think meal kits instead of just buying all of the ingredients for dinner.
Promoting the property with the fixtures needed turns it into a turnkey opportunity that tenants just can’t overlook. That’s definitely something worth exploring and building plans around. When viewing properties, start looking at the expanded opportunities beyond simply occupying the building for your own interests.
The Road Ahead
Life sciences, data centers, 3d printing cooperatives, and more are all looking like prime opportunities as the post-pandemic period rolls forward. Building plans around the industrial property for sale in Austin, TX, can feel a bit overwhelming with so many different combinations to choose from.
However, going back to solid numbers, examining the value of each property, and looking at the opportunities with an eye for the data are all key points to keep in mind. Just because a property looks great doesn’t mean it has to go on an acquisition list. It’s perfectly fine to observe the market a while before making any solid moves.
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