E-commerce changes everything. It makes consumer desires more accessible, and saves them the time invested in driving to a store just to find out they are out of stock of a favorite item. The momentum of e-commerce is a growth driver for our economy, producing a greater need for industrial real estate conveniently located throughout the United States for quick distribution to hungry buyers. Consumers’ demand for quicker delivery of products creates the perfect opportunity for the increase in industrial facilities from which to distribute goods. Enter the industrial real estate investors.
Oklahoma real estate investors are quickly learning that industrial real estate is a viable and profitable place in which to invest. Here are some reasons why:
- Less Financial Drain When Properties Are Vacant – For real estate investors, it comes with the territory to have vacancies from time to time. Investors have to pay for heating, air conditioning, property maintenance, property insurance, and taxes when rentals are vacant. But investors take a greater financial hit from vacancies in office space, retail space, and rental apartments than they do from industrial real estate properties.
- Income Returns Are Consistently Strong – For over two decades, income returns on industrial real estate properties have performed consistently well compared to other types of properties. With the rise and increase of e-commerce, strong income returns are forecast to continue. Not only do today’s consumers order their preferred purchases online for specific items not carried in the stores, but brick and mortar stores additionally offer online orders for customer convenience, bolstering the need for industrial real estate to satisfy consumer purchases quickly.
- Quick and Easy to Build – It typically takes less than a year to build an industrial real estate property. With simple design and straightforward needs, these buildings go up fast and can also be occupied quickly. When you contrast the difference in building an apartment or retail space verses building a simple industrial facility, it’s easy to see why investors lean toward industrial opportunities in today’s e-commerce-loving world.
- Solid Market Liquidity – A solid market features the ability to quickly buy or sell an asset without producing a drastic change in its price. Liquidity is about how big the tradeoff is between the speed of the sale and the price at which the property can be sold. Industrial real estate provides investors with strong liquidity, which gives them incentive to invest. When it’s time to exit the industrial investment, private and institutional investors often buy industrial properties readily—particularly when they are in an ideal urban location.
- Re-leasing the Industrial Space Costs Less than Other Types of Investment Properties – Let’s face it, things are often less expensive to deal with than people. When the lease is up for a tenant in an office space, retail space, rental home, or apartment, there is time consuming and costly work to be done before re-leasing to a new tenant. During the turnaround, cleanup and space preparation alone can require repainting the whole space, carpet cleaning or reflooring the space, and maintenance or upkeep on other major items within the space.The best time to address potential problems and proactively protect your investment is between leases. The beauty of industrial real estate in Oklahoma lies in how basic the needs of the space are. Since industrial space simply houses items ready to ship, the re-leasing costs are a lot less than other investment property types.
- Straightforward Needs of Oklahoma Industrial Real Estate Tenants – Businesses either make things or store things in Oklahoma industrial properties. Property tenants are businesses with common goods used by most people daily. The basic industrial building is made up of simply walls, a roof, and a modest office. With the nature of industrial structures being basic, and the flow of the businesses they house straightforward, they are simple to build, maintain, repair, and lease—making them attractive investment options for savvy business men and women.
- Optimal Industrial Real Estate Locations Lease Easily – Because today’s consumers not only want to purchase items online, but also want them delivered to their door quickly, the location of industrial real estate matters. Those built near a major highway or an airport lease easily due to the added benefit of proximity in which to mobilize products and satisfy consumers in a timely fashion. And selling an industrial real estate property in these types of locations proves profitable.
The Progression of Industrial Investment
Each step involved in industrial investments requires sound judgment, knowledge, and a reliable network.
- Buy an industrial property in an ideal urban area such as Tulsa or Oklahoma City, for an attractive price
- Complete value-adds on the property such as
- Renovating the facility as needed
- Improving docks to streamline distribution
- Repairing parking lot as needed
- Dividing the space within the facility
- Utilize the investment by locating and leasing to good tenants
- When the time is right, sell the investment for profit
Investing in Existing Tulsa and Oklahoma City, Oklahoma Industrial Real Estate
In general, it is most cost effective to begin industrial investing by buying already existing industrial real estate. Purchasing such properties—particularly in urban locations like Tulsa and Oklahoma City, Oklahoma—result in sound financial increase for real estate investors.
Seize Opportunities with the Assistance of Professionals at McGraw Commercial Properties
Investors desiring to buy or sell industrial assets benefit from McGraw Commercial Properties’ vast network of institutional and private capital buyers and sellers. Deep capital markets expertise, along with insight on global economic trends and real estate capital markets issues, prepares investors to seize great opportunities in a variety of market conditions.
Avoid common mistakes investors sometimes make and get busy investing with wisdom and confidence. See our Commercial Listings and call McGraw Commercial Properties at 918-388-9588 to discuss your CRE needs.