There’s no doubt that leasing an industrial facility is a big investment for your company. And you cannot underestimate the importance of conducting a successful site inspection of an industrial facility as a crucial step in the leasing process.
Failure to complete this critical step can result in the leasing of the wrong industrial facility, which will hurt your overall business.
The simple straightforward steps in this guide will help you in conducting a successful and cost-effective inspection of industrial properties of your interest.
STEP 1: ESTABLISH AND DOCUMENT YOUR INSPECTION GOALS AND REQUIREMENTS
Setting clear goals and objectives for an industrial property site inspection is essential for making sure the inspection is focused and productive. You must identify your operations’ specific requirements and create a checklist to make sure that all necessary aspects are covered during the inspection.
You must consider a variety of factors when setting goals, including the amount of space needed, the layout, location, and functionality of the facility. For example, if your company needs a warehouse, you may require a facility with enough space for storage as well as the loading and unloading of goods. If your company operates a manufacturing plant, you may require a facility with plenty of floor space, high ceilings, and adequate infrastructure to house specialized equipment.
You can make sure that you cover all of the essential aspects of your requirements during the inspection by creating a checklist. This can include things like utilities and infrastructure, security measures, legal and regulatory compliance, and accessibility.
Having clear goals and objectives also helps you in objectively evaluating potential industrial properties. You can compare different properties and assess their suitability for your operations by using a checklist of specific requirements. This can save you time and money in the long run by narrowing down the list of properties to those that meet your requirements.
STEP 2: CONTACT A LICENSED INDUSTRIAL REAL ESTATE AGENT AND SCHEDULE AN INSPECTION
Contact a licensed industrial real estate agent in your desired location to help you locate and inspect the properties you’ve shortlisted in that area. Typically, this is the agent in charge of the facility you’re inspecting. They will help you navigate the property and will answer any questions or concerns you may have about it.
After contacting them, schedule an inspection to tour the facility and learn about its infrastructure, features, and capabilities. If the facility is currently in use, try to plan your visit during business hours to see it in operation.
STEP 3: ASSESS THE LOCATION AND ACCESSIBILITY OF THE FACILITY
The location of the facility can have a significant impact on your business’s success because it affects transportation costs, customer accessibility, and access to resources.
You must think about the facility’s proximity to major highways, airports, and ports when evaluating its location. This will determine the ease of transporting and shipping goods to and from the facility.
A facility near major transportation hubs can significantly reduce transportation costs while also increasing efficiency.
A warehouse near a major highway, for example, can quickly transport goods to customers or suppliers, reducing delivery time and costs.
When determining the location of an industrial property, accessibility is also an important factor to consider. Trucks, employees, and visitors should all have easy access to the facility.
A facility that is difficult to reach can cause significant transportation delays, resulting in lost business opportunities.
For example, a warehouse in a congested area with limited access can cause delays in delivering goods, resulting in customer dissatisfaction and lost revenue.
You should consider the infrastructure of the location, such as the availability of public transportation and parking facilities, in addition to accessibility. If the facility is accessible by public transportation, employees
and visitors will find it easier to commute, reducing traffic congestion and parking issues.
STEP 4: CHECK THE BUILDING’S CONDITION
Inspecting the building’s condition is an important part of the inspection process. This includes evaluating the building’s overall physical condition, including the roof, walls, floors, doors, and windows. Also, it includes a review of the electrical, plumbing, and HVAC systems in the building.
You should thoroughly inspect the roof of the building for any signs of damage or wear and tear during the site inspection. This includes inspecting the structure for leaks, cracks, and other signs of structural damage. Inspect the walls, floors, doors, and windows to make sure they are in good condition and function properly. Damaged areas, such as cracks or broken windows, should be noted and repaired.
It is also critical to inspect electrical, plumbing, and HVAC systems. These systems are critical to the building’s functionality, and any malfunction or damage can cause major disruptions in business operations. Overloaded circuits, outdated wiring, and other potential hazards should be checked in the electrical system.
Inspect the plumbing system for any leaks or damage. Inspect the HVAC system for proper operation, airflow, and ventilation. Note any signs of wear and tear or damage to the building. This includes any signs of water damage, mold, or other potential hazards. These issues can have a significant impact on the building’s integrity and occupant safety.
STEP 5: EVALUATE THE FACILITY’S SPACE
You need to look at the space and layout of an industrial property during the site inspection. The amount of available space and the layout of the facility can have a significant impact on the operations, efficiency, and productivity of your business. Consider factors like space and layout, such as the number of loading docks, clear height, and column spacing.
If you require frequent loading and unloading of goods, the number of loading docks is an important consideration. You should evaluate the number of loading docks available, their size, and the distance between them. This information can help you in determining whether the facility can meet your shipping and receiving needs.
Another critical factor to consider during the site inspection is clear height. The vertical space between the floor and the lowest obstruction in the ceiling, such as lights, sprinkler systems, and ductwork, is called clear height. This area is important if you require vertical storage or large equipment. You should make sure that the facility’s clear height meets your needs and is appropriate for your operations.
Column spacing is also important, especially if you require open floor plans or large equipment. Column spacing refers to the distance between the facility’s support columns. You should assess column spacing to make sure that it is appropriate for your equipment and operations.
In addition to these considerations, you should consider the facility’s layout, which includes the arrangement of offices, storage areas, and other spaces. The layout should be appropriate for the operations of your business and allow for the efficient movement of goods, equipment, and employees.
STEP 6: CHECK SECURITY MEASURES
When conducting an industrial property site inspection, it is important to review the security measures in place to ensure the safety and security of your assets and employees. This includes inspecting things like surveillance cameras, alarms, and access control systems, to make sure that they meet your needs.
Surveillance cameras are an important part of any security system because they deter theft and vandalism. They also serve as proof in the event of a break-in or other security breach. You should double-check the placement and coverage of the cameras to ensure that they cover the entire facility.
According to a National Retail Federation report, retailers lose an estimated $46.8 billion per year because of theft, shoplifting, and other retail crimes. However, implementing security measures can significantly reduce these losses. A study conducted by the University of North Carolina discovered that implementing video surveillance systems reduced theft by 16%.
Alarms are another important security measure that can alert staff and security personnel in the event of an emergency or a security breach. Unauthorized access or movement within the facility can set off alarms. Check regularly that the alarms are working by testing them.
Access control systems, such as key cards or biometric systems, are also important security measures that aid in the control of facility access. They guarantee that only authorized personnel have access to the facility, lowering the risk of theft or property damage. You should audit access control systems to ensure they meet your security requirements.
STEP 7: ASSESS UTILITIES AND INFRASTRUCTURE
It is important to check if utilities such as electricity, water, and gas are working and if lighting, ventilation, and other infrastructure are in good condition. This will help in identifying any potential issues before committing to a location and making sure that your business can operate efficiently and cost-effectively.
The availability and capacity of utilities such as electricity, water, and gas are critical to the operation of your business.
A manufacturing company, for example, may need a lot of electricity to run machinery. Lacking enough electricity supply may cause production delays or even stop operations. Similarly, a food processing plant may require a dependable and clean water supply to meet health and safety regulations.
It is also critical to evaluate lighting, ventilation, and other infrastructure features. Appropriate lighting is critical for productivity, safety, and adherence to occupational health and safety regulations.
Proper ventilation is essential for making sure a safe working environment and preventing the buildup of hazardous gases and chemicals. A pharmaceutical plant, for example, may require specialized air-handling units to maintain the quality of its products.
STEP 8: CHECK THE REGULATORY AND LEGAL COMPLIANCE OF THE FACILITY
Another critical aspect of conducting a successful industrial property site inspection is making sure that all legal and regulatory requirements are met. Failure to follow legal and regulatory requirements can result in hefty fines, lawsuits, and reputational damage.
Permits and licenses are required for a variety of industrial activities, including construction, hazardous waste disposal, and air emissions. A chemical manufacturing plant may need a permit to discharge hazardous waste, whereas a food processing facility may need a permit to discharge wastewater. Failure to obtain the necessary permits can result in fines, legal action, and even business closures.
Environmental regulations must also be considered during the industrial property site inspection. The industrial sector is a major source of pollution in the environment. As a result, your company must follow environmental regulations to reduce your environmental impact.
The Clean Air Act and the Clean Water Act, for example, establish regulations that businesses must follow to reduce air and water pollution. Noncompliance with these regulations can result in fines, legal action, and a tarnished reputation.
Other critical considerations during the industrial property site inspection include zoning and land use. Zoning regulations govern what activities can take place in a specific area, whereas land use regulations govern how the land can be used. If your company operates in an area that is not industrial-zoned, you may face fines, legal action, or even closure.
STEP 9: DISCUSS LEASE TERMS
When conducting an industrial property site inspection, you must discuss lease terms with the facility owner or manager to ensure that your business can operate cost-effectively and with the flexibility to adjust to future needs.
Rent is one of the most significant costs for businesses, so you must negotiate a reasonable rate. It should be in line with market rates for comparable properties in the area. Clarify who is responsible for any additional costs, such as maintenance fees or utilities.
Another important factor you should consider is the lease term. Make sure the lease term is long enough for your business to stay stable, but also flexible enough to change in the future. As a startup, you may need a short-term lease to test the market. A more established company may prefer a longer-term lease to reduce costs and for stability.
Another critical consideration is a security deposit. The security deposit protects the property owner from damage or nonpayment of rent. Specify the amount of the security deposit as well as the terms of its return.
Renewal options are also important factors to consider. The lease agreement should include renewal options to give your business the flexibility to extend your lease if necessary. Renewal options should include specific terms and conditions, such as rent increases or notice periods.
It is important that you carefully review the lease agreement before signing it to avoid any unexpected costs or legal disputes. The lease agreement is a legally binding agreement between your company and the property owner. It outlines both parties’ rights and responsibilities and includes important details such as rent, lease terms, security deposit, and renewal options.
STEP 10: FOLLOW UP
After your site inspection, follow up with the facility manager to make sure any issues are addressed.
You can ask any additional questions or clarify any issues that were not clear during the initial inspection during the follow-up. It is also an opportunity for you to discuss any changes or improvements that may be required for the facility to meet the needs of your business.
A facility evaluation against your checklist is also an important step in the follow-up process. The checklist should include all of the critical elements that your company requires from the facility, such as utilities, compliance, lease terms, and infrastructure. The evaluation should consider the facility’s strengths and weaknesses and compare it to other potential locations.
FINAL THOUGHTS
A successful industrial property site inspection requires careful consideration of numerous factors. Utility and infrastructure assessments, compliance, security measures, building condition, location, and accessibility are all critical factors for you to consider before deciding.
This guide will help you find a facility that meets your needs by doing a thorough inspection and considering all relevant factors. This will ultimately lead to increased efficiency and profitability.
Contact our licensed agents for free to lease an industrial facility in Wisconsin or Ohio for the manufacturing, warehousing, or distribution of your products. Our agents will provide you with the best guidance and make sure you get the most value out of your lease.
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