Owner-occupied industrial properties are industrial buildings where the property owner occupies the building. These properties range from warehouses, factories, storage spaces, and other industrial-type spaces.
The aspects and benefits of buying and occupying your own industrial building are significant. Let’s explore some of them:
Control and Customization
One of the main benefits of an owner-occupied industrial property is that it gives the owner maximum control over their operations.
When you own the building, you can customize the space to suit your unique needs, and you won’t have to worry about landlord restrictions. Additionally, you’ll have complete control over maintenance and repairs, which can reduce your costs over time.
Many industrial property owners run their businesses from their buildings, so having the flexibility to adapt and change their space to fit their evolving needs is invaluable.
Expand your business
Another benefit of owning an owner-occupied industrial property is using it as collateral. If you secure a loan against the property, you can use those funds to expand your business, hire more staff, or add new equipment.
The property’s value can also appreciate over time, which could lead to increased equity and more borrowing power down the line.
Upgrading to a more extensive property
One downside of these properties is that they tend to be smaller, around 8,000 square feet, which may not be enough for your needs. On average, 15,000 square feet is the recommended size for these properties.
However, many property owners choose to sell their existing property and use the money for a 1031 exchange, which allows them to defer their capital gains tax and purchase a larger space that better fits their needs.
Limitations
It’s important to note that owner-occupied industrial properties can only be occupied by the owner or their employees.
This means that trade builders who build and sell properties as merchandise cannot use this investment option. So, if you’re not an investor or an entrepreneur, this type of investment may not be the best fit.
Investing in an owner-occupied industrial property can be wise for business operations and financial reasons. However, it’s essential to know the limitations of this type of investment, such as the property size and who can occupy the space, before diving in.
If you’re interested in exploring this investment further or need help finding the right property, a Commercial Real Estate Broker can guide you in the right direction.
Ready to buy an owner-occupied industrial property?
