One of the major themes of my channel is that industrial real estate should be broken down into
three subcategories; manufacturing, warehousing and flex. I'm standing in a building which is
a great example of a flex property. In this video I'm going to walk you through it and
point out what makes this a flex property. I'm also going to give you a very important
tip when dealing with flex properties at the end of the video, so stay tuned until the end.
But first let's do a quick refresher on the two major industrial real estate categories.
Starting with warehouses, which can also be called distribution centers, logistics facilities,
or fulfillment centers you'll typically see very high ceilings lots of racking and numerous loading
doors. With e-commerce growing at a rapid pace these are the industrial properties that most
people are often familiar with. But manufacturing properties are also a major segment of the market.
Generally these are the properties where things are made, manufactured or assembled
properties can be heavy manufacturing or light manufacturing and there's certainly some overlap
with warehouses as all these manufactured goods need to be stored and shipped as well.
Then there are all the other industrial properties that aren't necessarily designed
for warehousing or manufacturing. Industrial real estate is a very broad term and there
are many other uses beyond manufacturing and warehousing. I've seen numerous types
of businesses occupy industrial buildings such as lab space, straight office space, churches,
self storage and showrooms, to name a few. Next time you go into a Costco or Home Depot, take a
close look around and you'll see that these giant retail stores are really just big flex properties.
So that takes us to this building, which is in a major industrial park with industrial
and office properties surrounding it. Although this property is zoned industrial it sits on a
major intersection so it has direct exposure to two busy roads. Let's take a walk through it and
I'll show you some of the characteristics that make this a great example of a flex
property.
The first thing that you'll notice is that there are very high ceilings
and it's pretty much one big wide open space. The previous tenant was a large furniture retailer
so they used the space as one big giant showroom. Before that it was a big fitness facility and it
even had a swimming pool at one point. At the back is a small warehouse space with a dock door which
was converted to a ramp essentially so things can be brought in from a grade level this door could
be converted back into a dock or extra overhead doors could easily be added along this wall.
This is a mezzanine space this one in particular is concrete and steel but it's also common to see
the mezzanine space constructed out of wood. Concrete and steel is more sturdy dampens
sound noises and is typically engineered to hold more weight, but wood is generally less
expensive to build, although that might not be the case with sky-high lumber prices right now!
You'll see that this building could be retrofitted to accommodate a number of
different uses and that's really the hallmark of a flex property. So I'd encourage you next time
you're going through an industrial property to identify whether it's a manufacturing property,
a warehouse or a flex building as that will ultimately determine what type of use will be
suitable in it. The list of potential uses that can work inside of flex property are virtually endless.
But one point I really want to emphasize is to always check with the zoning regulations for your
city. Just because a property might work well for a certain business it still needs to be compatible
with the zoning regulations in order for the municipality to grant them a business license.
I know this sounds straightforward but this type of issue arises all the time. A company finds a
property that works for them only to discover that they're unable to get approval to operate
the space from the municipality. You can save yourself a ton of time and effort by confirming
what type of use classification the business is and what zoning classifications are permissible.
I hope this helped explain what a flex property is if you've got any value
from this video I'd greatly appreciate hitting that like button. Thanks for watching catch you in the next video. I hope this helped explain what a flex property is...
I hope this helps explain what a flex property is...
... and if you've got any value from this I'd greatly appreciate that refresher
but first let's do a quick refresher on the two major industrial real estate categories.