What do industrial leases look like?

[Joshua Dorkin]

I'm curious about the different kinds of leases available on industrial properties....

[Bill Gulley]

Issues are very broad. It depends on the size and scope of the property,its location and the tenant. One thing will be the applicable EPA and environmental issues concerning that industry. Mainly air, water, noise and hazardous waste issues. A steel fabrication tenant will need to comply with runoff of cleaning materials and heavy metals, safety issues with welding gases, OSHA requirements applicable to the structure (safety rails, overhead beam loads that are part of the building structure and used for cranes and lifts). Issues are very different for a small welding shop vs a manufacturing/fabrication operation.

A car wash will have environmental issues and storm water requirements. An auto salvage yard will need to meet regulations applicable to oils, petroleum products, tires, and storm water. Paint boths are another issue.

Industry generally requires specialized utility services, electrical and water purification. Such amenities are made to the property just as infill but if the tenant leaves, such items may be required to be placed back in the original service or left on premises.

Landlords of an industrial property need to be familiar with the typesof industries that are allowed as well as the nature of the business.
One property I was involved with comes to mind that had railway easements through the property for rail cars to pass right by loading docks. A rail lease. Tennats will be responsible for clearing tracks, reporting conditions and keeping the area clear of any obstruction.

Each lease is a customized lease, specifically addressing the particular issues of the business operation in relation to the improvements and the nature of the operations....or it should be.