How Much of Your Industrial Property Should Be Office Space?
To that end, nearly all properties, regardless of type, have a dedicated percentage of the building reserved for office usage.
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!Virtually all industrial properties have some space dedicated to office functions. Although an industrial asset’s primary purpose may be to manufacture goods or facilitate distribution and logistics processes, administrative functions are also necessary to keep any operation running.
How Much Office Space Do Industrial Tenants Need?
To that end, nearly all properties, regardless of type, have a dedicated percentage of the building reserved for office usage. A ballpark figure for an industrial asset of less than 100,000 square feet would be that it would include between 4% and 10% of its space for office purposes. A large, 1 million-square-foot facility, however, would typically offer a much smaller percentage of office space.
Different tenants may have different ideal office sizes, so it is important to gauge the standard office build-out percentage in your industrial market, if possible. But even within a market, percentages can vary. A small brewery headquartered in its brewing facility would likely require more office space than, say, a regional distribution center for a large shipping company. The brewer would need space to handle human resources, sales, IT, and other functions, while the shipping company would have dedicated office space — in an office building — where it centralizes most of these business processes.
Related Questions
What are the benefits of having office space in an industrial property?
Having office space in an industrial property can provide a number of benefits. For example, industrial properties are typically located in areas with easy access to major transportation corridors, which can make it easier for businesses to transport goods and materials. Additionally, industrial properties often have wider or deeper bay spacing near loading docks, which can make loading operations safer and more efficient. Finally, industrial properties may offer more usable square footage than other types of commercial properties, which can be beneficial for businesses that need a lot of space for their operations.
What are the drawbacks of having office space in an industrial property?
The drawbacks of having office space in an industrial property include the lack of natural light, the potential for noise from loading and unloading operations, and the lack of amenities such as restaurants and shops that are typically found in office buildings. Additionally, industrial properties may not have the same level of security as office buildings, and the interior features of industrial buildings, such as column spacing, may limit the usable square footage of the property.
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What is the optimal ratio of office space to industrial space in an industrial property?
The optimal ratio of office space to industrial space in an industrial property depends on the specific needs of the tenant. Generally, industrial properties should have more industrial space than office space, as the primary purpose of the property is to facilitate the storage and distribution of goods. However, some industrial properties may require more office space than industrial space, depending on the tenant's needs. For example, a tenant may need a large office space to accommodate a large staff, or a tenant may need a large office space to accommodate a large customer service team.
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What factors should be considered when deciding how much office space to include in an industrial property?
When deciding how much office space to include in an industrial property, it is important to consider the needs of potential tenants. Ask yourself questions such as: How many employees will need to be accommodated? Is there room to expand? Could unoccupied space be separated and leased to other tenants? Additionally, consider the layout of the space. Do floor plans allow for an open office setup, or are walled offices already configured? Making changes to the setup can take significant resources, both time and money, so ensure you have a clear eye on what potential reconfiguration work is needed.
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What are the most common types of office space in an industrial property?
The most common types of office space in an industrial property are flexible buildings, which are usually designed to incorporate both office space and industrial space, including R&D centers, light manufacturing areas, and small amounts of warehouse space. Additionally, data/communications centers are usually designed to accommodate major telecom providers, and have specialized floor slabs and HVAC systems intended to keep electronic equipment in good condition.
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What are the best ways to maximize the efficiency of office space in an industrial property?
The best ways to maximize the efficiency of office space in an industrial property are to ensure the building has wider or deeper bay spacing near loading docks, and to consider the size and layout of the space. Wider or deeper bay spacing near loading docks, often referred to as speed bays, can provide an additional benefit by making loading operations safer and more efficient. Additionally, it is important to consider the size of the property and whether it is large enough and flexible enough to accommodate one or multiple tenants’ employees and equipment. The layout of the space should also be taken into account, such as whether floor plans allow for an open office setup, or if walled offices are already configured. Making changes to the setup can take significant resources, both time and money, so it is important to have a clear eye on what potential reconfiguration work is needed.
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