Industrial Lease Facilities (exclusive of specialty buildings like manufacturing facilities or specialty cargo handling facilities) come basically in three different varieties…
Office Service, Office Warehouse, and Distribution Space.
Office Service space usually contains from 40% to 100% office area (balance in either hot or A/C warehouse) and is typically used by companies that need a fair amount of office space but also need a limited amount of warehouse or assembly area. All types of companies from service contractors, dental equipment companies, R & D labs, call centers, to mortgage companies call these types of facilities home. These buildings usually have the rollup doors on the rear of the building since often times the companies will have customers visit them at their offices and the companies want to maintain a nice image.
The storefront, building exterior, and landscaping most often is higher finish than office warehouse or distribution space. Typically the rollup doors for the warehouse are at grade level meaning that one could drive a pickup truck or forklift from the warehouse into the service parking area behind the building. While convenient, these building do not lend themselves to receiving shipment from 18 wheelers. The clear height from the warehouse floor to the ceiling may be from 12’ to 16’, which is low by industrial standards.
The building may or may not have a fire protection sprinkler. Available parking for automobiles is usually more generous that office warehouse or distribution projects since the tenants typically have more employees. The annual rental rate for this type of space (including minimum rent and NNN charges) is usually higher than office warehouse or distribution space.
Office Warehouse space usually contains from 10% to 20% office area (balance generally in hot warehouse) and is typically used by companies that need limited office space but along with a warehouse or assembly area. Generally these companies are primarily warehousing some type of product but may also be handling the sales function out of the location. These buildings may have the rollup doors on the front or rear of the building. The building exterior most often is basic tilt wall concrete and landscaping and storefront entry are minimal.
The rollup doors most often are “dock high”, meaning 48” above the parking area, a dimension suitable for 18 wheelers or container trucks. The clear height from the warehouse floor to the ceiling may be from 18’ to 22’, which is average by industrial standards.
The building most often will have a fire protection sprinkler since many municipalities will limit stacking height in the warehouse to less than 14’ if the building I not sprinklered Available parking for automobiles is less generous than office service facilities. The annual rental rate for office warehouse space (including minimum rent and NNN charges) is usually lower than Office Service Space and higher than Distribution space.
Distribution space is designed for companies that need large amounts of space (40,000 SF up to 500,000 SF) to receive, store and distribute product. The office space may be only from 2% to 10% of the total SF of the space. The facility may have rollup doors on either two, three, or four sides of the building and the facility may also be rail served.
Warehouse clear heights will run from 22’ clear to as high as 40’ clear and the building will either have a wet system or ESFR system for fire protection. In some cases the facility is located in a Foreign Trade Zone or has certain types of inventory exemptions in order to minimize tax burdens. Some large buildings are crane served to assist in moving heavy items. Since distribution style building really are large boxes with very little office area, the annual rental rental rate is most often lower than comparable age office warehouse space.
Generally it takes from three weeks to five weeks to locate several spaces for the company to consider and to negotiate a lease on. That time frame, of course depends to a great degree on how fast the company proceeds with the decision making process. Additionally, it may take the building owner anywhere from two weeks to eight weeks to do any necessary remodeling, depending on the complexity of the work. Ideally, tenants should consider their relocation options no less than six months prior to the expiration of their lease.
WHAT DO WE
DO?...
Many business owners ask that! We function as a business’s
Real Estate Department, just like Citibank, IBM, or General Electric would have a seasoned real
estate professional on staff as a full time Director of Real Estate. We assist businesses in
evaluating their needs, developing location criteria, performing market searches for available
locations, and negotiating terms under which the company can lease or purchase property. As a
bonus to the businesses we represent, we can generally perform these activities at no cost to
the business since we are typically splitting a fee with the listing agent of the property. Our
in house data base has information on more that 1200 Houston full service office buildings and
350 San Antonio full service office buildings, so if you’re considering relocating or
expanding, contact John O’Connor for more information.
THE REAL ESTATE DEPARTMENT
John O'Connor
BROKER
Houston
Telephone
281-497-8696
PO Box 771612 Houston TX 77215
FAX 281-497-8752
San Antonio
Telephone 210-696-0276
PO Box 780697 San Antonio TX 78278
===
