How Can Rail Service Help Your Industrial Property?
Rail transport plays a major role in cargo shipment today. If your industrial property is near a rail hub, it may be wise to accommodate rail service.
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!Although most freight today is moved by trucks, rail transport plays a significant role in industrial operations. Railroads are generally more cost efficient — and more environmentally friendly — than trucks: A 2021 report from the Association of American Railroads highlights that freight rail transportation is three to four times more efficient than using trucks.
If you plan to develop an industrial property that can handle rail shipments, there are many different factors to consider, some of which were outlined in NAIOP’s September 2021 issue. The most important are related to site selection and getting a railroad company involved very early on in the development process.
Related Questions
What are the benefits of having a rail line near an industrial property?
Having a rail line near an industrial property can offer significant benefits, both in terms of operations and tenant demand. Rail lines provide a cost-effective way to transport goods, and can be a major draw for tenants looking for a convenient way to move their products. Additionally, having a rail line nearby can reduce the cost of shipping goods, as it eliminates the need for trucking services. This can help to reduce overhead costs for tenants, making the property more attractive to potential investors.
What types of industrial properties are best suited for rail service?
Rail service is best suited for industrial properties that are near a major seaport, intermodal terminal, or freight railroad line. These properties will realize significant benefits, not just in terms of operations but also tenant demand. Examples of industrial property types that are eligible for CMBS financing and may be best suited for rail service include warehouse/distribution centers, refrigeration and cold storage centers, flexible buildings, heavy manufacturing buildings, light manufacturing buildings, and data/communications centers.
For more information, please see the following sources:
How can rail service help reduce transportation costs for industrial properties?
Rail service can help reduce transportation costs for industrial properties by providing an efficient and cost-effective way to move goods. Rail service can be used to transport goods from a warehouse to a port, intermodal terminal, or freight railroad line, which can reduce the cost of shipping goods. Additionally, rail service can provide a direct connection to major transportation corridors, which can reduce the time and cost of trucking goods to and from the warehouse. According to the Railinc Corporation, rail service can reduce transportation costs by up to 70%.
What are the advantages of having a rail line near an industrial property?
Having a rail line near an industrial property can offer significant benefits, both in terms of operations and tenant demand. Rail lines provide a cost-effective way to transport goods, and can be a major draw for tenants looking for a convenient way to move their products. Additionally, having a rail line nearby can help reduce traffic congestion on highways, as goods can be transported more quickly and efficiently. Finally, having a rail line nearby can help reduce the cost of loan products, as lenders may be more willing to offer lower interest rates and more flexible terms for properties located near rail lines.
What types of businesses can benefit from having a rail line near their industrial property?
Businesses that require the transportation of large volumes of goods, such as distribution centers, warehouses, and manufacturing facilities, can benefit from having a rail line near their industrial property. Rail lines provide a cost-effective way to transport goods, as well as a reliable and efficient way to move large amounts of freight. Additionally, businesses that require the transportation of hazardous materials, such as chemicals, can benefit from having a rail line nearby, as it provides a safe and secure way to transport these materials.
For more information, please see Picking the Right Industrial Investment and What to Know Before Making Your 1st Industrial Property Investment.
How can rail service help increase the value of an industrial property?
Rail service can help increase the value of an industrial property by providing tenants with a cost-effective way to transport goods. Rail service can also help reduce transportation costs, as it is often cheaper than other forms of transportation. Additionally, having access to rail service can make a property more attractive to potential tenants, as it can provide them with a reliable and efficient way to move goods.
For example, according to JLL, rail service can help reduce transportation costs for tenants, as it is often cheaper than other forms of transportation. Additionally, having access to rail service can make a property more attractive to potential tenants, as it can provide them with a reliable and efficient way to move goods.
In addition, according to CBRE, rail service can also help increase the value of an industrial property by providing tenants with a cost-effective way to transport goods. Rail service can also help reduce transportation costs, as it is often cheaper than other forms of transportation. Additionally, having access to rail service can make a property more attractive to potential tenants, as it can provide them with a reliable and efficient way to move goods.