Large Industrial Manufacturing Facilities - What is What?

 Large Industrial Manufacturing Facilities - What is What?

Does your business (or one of your clients’) require a large industrial manufacturing facility in order to effectively operate, grow, and provide the highest quality products and services to consumers? Finding the right property can seem difficult, if not impossible, sometimes -- so the need to employ a qualified and experienced expert to represent your best interests is critical to achieving the desired outcome.

The nuances of negotiation, the small things (and big) to look out for that often go unnoticed when purchasing or leasing large manufacturing facilities, as well as potential perks and manufacturing incentives are all things that the team here at Industry One are industry experts on, and are here to serve as your representative on when you need to lease or purchase your next giant manufacturing plant.

Negotiations Can Make or Break a Great Deal

Many times, a promising deal can be ruined by poorly handled negotiations on the front end. Similarly, with the right team on your side, what may normally be out of your price range or feasible terms can be skillfully negotiated into reach of what your business needs for it to make sense. By utilizing seasoned professionals who know how to find you the best deals and negotiate the best sales prices, lease rates, and contract terms, you can rest assured that your money and time will be made to go further than it would without our team of experts representing you.

Perhaps you are a brand new manufacturing firm that needs a relatively small warehouse space to house your equipment and personnel for now, but you have massive plans for growth over the next decade. In this particular case, as our tenant client, we fight to secure your expansion rights to adjacent properties (also known as first rights of refusal) so that when tenants of adjacent spaces vacate their spaces or do not renew their leases, you have first right of refusal to sign a lease and expand into that space as your company grows and demands a larger footprint to continue serving clients. This is a powerful tool for smaller businesses that need manufacturing plants and intend to grow, but do not have the need or budget to lease the largest manufacturing building in the city for their first year of business. This is just one of the many ways our experienced team of professionals saves you money, and helps you plan for your company’s future growth and expansion while minimizing the amount of moves, lease buyouts, and obstacles that are required along the way. Similarly, for our purchasing clients, we are experts at obtaining option agreements with neighboring property owners to purchase their properties before going to market should you need to expand and purchase adjacent buildings or lots to build new manufacturing facilities on.

 

What Should I Look Out For?

When looking to lease, purchase, or build massive manufacturing buildings that are necessary to meet your manufacturing needs, it is important to not only be diligent when narrowing down properties and property requirements, but also know what to look out for during this process as well as the site visits. Physical characteristics such as square footage, age, and building condition are all at the top of everyone’s list, but what about the items that you may not be thinking about?

Take into consideration things such as the roof, glazing (and channeling on the glazing), dock height, and electrical. Are you and your team weeding out properties that do not meet criteria based on obvious physical characteristics alone or are you digging deeper? Be sure to pay attention to less obvious characteristics such as these and avoid future headaches and problems that can occur as a result of inadequate due diligence.

With roofing on industrial manufacturing properties, it is paramount that you request records of previous maintenance, any and all claims filed with insurance, most recent replacement (roof age), roof material, and expected lifespan. The lifespan of commercial roofing can be anywhere from 10 to 40 years depending on material, condition, local weather, and quality of construction so be sure that you get eyes on the roof if at all possible before submitting a letter of intent (LOI) to purchase or lease the property. 

Moving on to less obvious troublemakers, we have the glazing. First off, what is glazing? This is how we refer to windows across most types of commercial real estate, so when you see this word moving forward you will know that it is in reference to windows on the manufacturing facility. What problems can arise with glazing? For starters, it can be broken and be letting pests, water, and weather into your property and even cause a spike in utility bills if your property is climate-controlled. Even further, there is something called channeling on commercial glazing that is used during installation to create a seal around the panes of glass and to help direct water down and away from the property during rain storms to prevent pooling and decrease the possibility of leaks occurring. Improperly installed or deteriorating channeling can be more trouble than it is worth, leading to problems such as moisture and condensation buildup with glazing or even worse, interior flooding of your manufacturing plant. Having an expert on your side who knows what to look for and brings experienced inspectors to the table to look for things like this will save you time, money, and energy in the long run. 

 With things such as dock height and electrical, be sure to know what your business will need in the immediate future as well as several years forward. Planning for this will allow you to choose from a wider array of properties, and also have a framework in place for growth as you are ready. Having an adequate amount of dock space (with potentially varying heights if you expect to be dealing with anything from box trucks to tractor trailers), and knowing the electrical requirements of equipment you will have installed is crucial. For example, most manufacturing facilities will need three phase power in order to effectively (and more efficiently) run all necessary equipment without risk of overheating or blowing a fuse, as it is equipped to handle a significantly higher load than single phase that would normally be adequate for single family residential or small retail properties. 

 

Sweeten the Deal

Having the right representatives on your side can mean more than just getting the best price or lease rate. Here in New York and New Jersey, there are numerous manufacturing incentives offered to businesses looking to help offset the costs of their goods and services that they manufacture for the world.

For example, in New York we have tax credits of up to 20% on your real property taxes paid each year on business property located within New York State. This is a significant tax credit that can make a meaningful impact on the cash in your bank account at the end of the year. For this tax credit, your business property must solely be utilized for manufacturing, assembly, processing, or refining and requires a relatively small amount of paperwork to qualify. 

  

Incentives for Industrial Users

There are many Economic Incentives offered throughout the Country for Industrial Users For Example within the State of New York there are IDA’s (Industrial Development Agencies in different areas who offer incentives to qualified industrial real estate purchasers ranging from tax abatements starting at 50-60% over a 12-year period to 100% tax abatement through the PILOT (payment in lieu of taxes) program, developers and real estate investors have more reason than ever to build and buy warehouses and distribution centers in New York.  

Other States like South Carolina have something similar such as their FILOT program (Fee in lieu of taxes), and Texas even has Tax Incremental Reinvestment Zones (TIRZ) that allow a portion of annual property taxes to be re-allocated towards improvements in the zone.

For industrial developers building out an industrial business park for example, this is a fantastic way to build out a top-of-the-line industrial park. Be sure to ask us about what incentives your business may qualify for, as depending on the area you are located in or desire to purchase/lease a property, you could qualify for any number of incentives.

States, Counties and Cities will often create a special incentive for Industrial Developers for building such a Industrial Park on Baren land or repositioned properties

In summary, finding a large industrial manufacturing facility for your business can be a daunting process at first glance, but we are here to make it simple and stress-free. From handling negotiations, looking for and pointing out the small and often overlooked details, to working tirelessly to help you and your company find as many potential incentives and tax breaks as possible, Industry One is your go-to brokerage for white-glove industrial real estate services not only here in New York, but across the entire world.