Underwriting for an Industrial Property

[Sanat Bhandari]

Hi everyone - 

I have a light industrial property (small warehouse ~5000 sf) that I am currently underwriting. I wasn't able to find a good underwriting model for industrial assets and so, was wondering if someone could help me out so I can corroborate my model. Thanks!

~ Sanat

[Henry Clark]

If NNN your expenses aren't the issue. Your revenue is probably what dictates the analysis. Nice size property for renting. Key items to analyze are utility sizes, parking, door height/width and ceiling heights. For example if you have a 10 foot ceiling you only can market to say 1/5 of commercial or industrial potential renters. Also check if fire system is grandfathered in or is covered.

After the above your capex on roof, floor, parking, hvac, office buildout are important.