By James A. Schnur, CCIM
President and Designated Managing Broker
Integrated Real Estate Solutions
LinkedIn
The devil is frequently in the details, particularly when you consider industrial versus warehouse space. While these properties sound similar, they meet different needs. Before you plan to purchase or lease an industrial suite or a warehouse in the Chicago area, take time to evaluate how you plan to use that space.
Warehouse Space
The primary uses of warehouse space are storage and distribution. Distribution space may also house packing and shipping equipment, and both warehouse and distribution centers require shipping docks. Both types of commercial space frequently include administrative offices, particularly if the site will serve as the primary location of the business.
If you plan to lease or buy warehouse or distribution space, you need to determine what activities the space should support. For example, do you plan to “cross-dock” materials, that is, transfer product from one mode of transportation to a different method for the purpose of distribution? Do you receive products from multiple vendors, combine them into large shipments and send them to a single destination? Perhaps you plan to receive large shipments of product, divide these shipments into smaller packages, and distribute them by a variety of transportation options.
Your needs may include “transloading,” the process of moving product from one mode of transportation to another, for example, moving cargo from rail to truck. You may need space within the warehouse for “kitting” operations, the process of combining smaller items into “kits” for distribution. You must consider how you will move product in and out of the space and ensure the warehouse has properly sized docks and, to save on transportation costs, is located in close proximity of the desired modes of transportation.
Will you warehouse items requiring cold storage? Or, do you plan to use the building as a data center? These uses require space for specialized refrigeration storage or may require the ability to maintain a consistent internal temperature in the entire building.
Industrial Space
While the use of industrial space focuses on manufacturing, fabrication, and assembly, you likely also require office space on the premises. These production activities often demand the addition of warehouse space to receive and house inventories of raw materials, work-in-process, and finished goods. You may ship the finished goods to a separate distributor. However, if you distribute your own products, you will need to add space for shipping activities.
Do you need to manufacture your products in a Good Manufacturing Practices (GMP) clean room? Many industries such as pharmaceutical, medical device, and electronics must fabricate their products in “clean rooms,” spaces allowing the manufacturer to control the level of pollutants existing in the surrounding air. The Food and Drug Administration (FDA) sets the standards for GMP clean rooms, and International Organization for Industry Standards (ISO) regulations monitor compliance. Industrial space must accommodate these contained manufacturing units and comply with regulations such as the distance required between the top of the clean room and the ceiling of the factory.
Devilish Details
Finding the right space for your business not only means accommodating your current needs but also planning for growth. Whether you are simply relocating your operations, expanding warehouse space, or starting fresh, you need to plan well. Whether choosing to purchase a property or lease space in the Chicago area, consider contacting real estate professionals with the expertise to evaluate your needs. The team at Integrated Real Estate Solutions, Inc., with their in-depth knowledge and years of experience, can help you analyze your needs and ensure you include all those devilish details in your analysis. Do you need warehouse, distribution, or industrial space? Yes, the devil is in the details, but proper planning with the expertise of a real estate professional can guarantee you find the right space for your business.
Integrated Real Estate Solutions, Inc. provides clients with the in-depth knowledge and experience that is critical to determine the right path to your next move, lease renewal, or strategic repositioning of your real estate portfolio. Contact us or call 847.550.0160 today about your needs, and put our success to work for you.