5 Often Neglected Consideration When Searching for an Industrial Facility

2/22/2017

As 2017 is now well under way and businesses across southern California are experiencing the strengthening marketplace, many owners & occupants of industrial property face the challenges of capacity restraints as they seek to grow their business. In this month’s Industrial Insight we take a closer look at some considerations, beyond price and location, for companies looking to make facility changes. While price and location are important in any real estate decision, there are five other factors that should be taken into view:

Sprinkler Systems
Truck Loading
Office Improvements & Alterations
Age & Condition
Americans with Disabilities Act (ADA) Compliance

Sprinkler System
Building fires have resulted in serious injury and the damage or destruction of much property. As a result the fire code has continually been updated and the requirements and restrictions placed on occupants have increased.
Things to Consider

Sprinkler requirements are driven by the occupant’s business, products, and racking.
Not all sprinklers are the same - check the system and density rating.
Older sprinklers may need flow test to verify main line street water supply.
The fire department can restrict product storage based on inadequate systems.
Upgrading systems can be very costly .
Having sprinklers can provide savings on insurance premiums.

Truck Loading:
As many occupants and businesses in southern California transition to a more distribution and logistics oriented business, the flexibility of loading and getting trucks in, out, and around a property becomes critical.
Things to Consider

Does your business absolutely need dock high loading positions, or can you operate with only ground level loading? The latter will also provide more building options.
Can an exterior truck well or ramp be installed?
Does the property provide sufficient turning radius and street access for larger trucks?

Office Improvements & Alterations:
When looking for a property it is important to consider the existing office layout and what changes you may envision making.

Large changes such as adding offices or moving walls around can trigger building permits being required. Permits being pulled may also result in ADA (discussed later) and/or Title 24 (energy efficient standards) requirements.
It is important to verify, especially in heavily built out offices, that it is all permitted.

Age & Condition
When considering buildings, the following big ticket items must be evaluated:

Roof Age - Roofs generally have a useful life of 20 years. A roof is expensive to replace.
Asphalt condition - Two options for reconditioning: re-slurry or complete replacement. There is a significant cost difference between these options.
Earthquake retrofitting - This can be required by banks (and some cities) for older buildings.
Past uses & environmental concerns - Who has operated in the building previously? Get an environmental site investigation as needed.
Cosmetic items (paint, carpet, flooring, restrooms and landscaping). While these can seem minor, the costs can add up.

American with Disabilities Act (ADA) Compliance
For industrial properties that are not ‘open to the public’ ADA requirements can still be a significant liability. New upgrades are generally triggered by occupants pulling a building permit at the corresponding city. The amount of ADA upgrades required corresponds to the amount of the improvements one is seeking to make. Some of the key areas ADA addresses are restrooms size, accessibility ramps, parking spaces and striping, and doorway sizes.

In conclusion:
While some of the costs associated with the above items are difficult to avoid, it is far better to understand your potential exposure going into a deal. Work with a real estate professional who can and will help you identify these areas of consideration, and work with someone who has a network of professional referrals to help you navigate the necessary steps and remedy any issues.