Strategies for Selling Industrial Property

April 21, 2021

The demand for ecommerce fulfillment centers and delivery logistics in the US means that industrial real estate is on the rise. Research from JLL shows that demand for industrial real estate in the US may grow by more than 1 billion square feet by 2025.

If you’re interested in getting involved in this growth, whether by developing new properties or selling existing properties, you’re going to need strategies to help you sell industrial real estate.

Put Your Best Foot Forward

Don’t cut corners when you’re preparing your marketing materials.

Include as much information as you can up front so buyers can get a good feel of what you’re offering. Make sure that everything you’re presenting gives the best first impression of your property.

A few good ways to do this are through:

  • Professional building photography
  • Virtual property tours
  • Interactive location maps highlighting nearby assets (roads, rails, airports, etc.)
  • Showing building plans, especially if located in an industrial park
  • Highlighting existing building certifications

Don’t throw all of this at the buyer immediately. Have a good teaser ready with the main selling points, then back it up with everything else when you get a buyer to bite.

Knowing When to Sell

Residential real estate has very distinct seasons that are measurably better or worse for buyers or sellers. Industrial doesn’t have the same level of distinction, but there are still better and worse times to buy. Consider the following:

  • Lease Terms

Investors tend to prefer long lease terms so they know what to expect out of their investment over the next 5 – 10 years. If you have a tenant whose lease is coming up to expiry within the next 5 years, it could impact the desirability of your property.

  • Jumping on the Bandwagon

Sometimes big deals are made in your local area or a spotlight is shown on the industrial sector for one reason or another. If there are favorable reports coming out about your area or other large industrial companies moving in, it may be an ideal time to market your property.

Improving the Property

Because you don’t know the nature of the work your buyer or their tenants will be doing in the building, improvements are subjective to the building itself. However, there are some universally positive improvements you can make to the property that will help it stand out in the market.

  1. Fix the Roof—Even in a NNN lease where the tenant takes on most of the costs of maintaining a building, things like the roof are still the landlord’s responsibility. Industrial buildings with new or newly repaired roofs are less likely to need additional capital injections for years, making them more attractive.
  2. Work on the Outside—Buildings that look better from the outside are easier to sell. Industrial properties really benefit from a fresh coat of paint, clean windows, working lights, and no visibly broken parts on the outside. If there’s a parking lot or outdoor space on the property, make sure it’s neat and well maintained. All these efforts give your property a turn-key feel that improves value perception.
  3. Design a Sign Space—For industrial buildings that have the space outside, a designated area for business signage is a nice differentiator. Good landscaping around a signage space goes the extra mile, especially on the first impression.

Narrowing Your Target Market

The focus of your marketing efforts should be on creating a better pool of buyers rather than a larger pool of buyers. Reaching out to a narrow, specific group to market your property is better than broadcasting widely when you’re selling industrial real estate.

Targeting allows you to market in the right places, getting a better ROI for your marketing budget. Consider where you’re putting out ads or who you’re contacting to spread the word about your listing. A narrow market means you’re more likely to find buyers with stronger intent to purchase.

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