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Everything You Need to Know About Leasing Industrial Rental Properties

When it comes to finding an industrial rental property, there are several crucial factors to consider. Industrial rental properties, such as large buildings, play a vital role in accommodating businesses that require storage, manufacturing, picking and packing, and logistical operations.

In this thorough guide to industrial property leasing, we will explore the key considerations, including location, size, usability, and infrastructure. Whether you’re looking for industrial buildings for lease or commercial industrial lease options, we intend to help you make an informed decision that aligns with your business needs.

Understanding the Basics of Leasing Industrial Rental Properties

Before diving into the finer details, let’s clarify what industrial property leasing entails. Industrial properties are specifically designed to meet the unique requirements of manufacturing, warehousing, and distribution businesses. These properties come in various forms, including warehouses, factories, distribution centers, and flex spaces. Unlike other types of commercial leasing, industrial property leasing focuses on providing the necessary facilities, space, and infrastructure to support industrial operations.

Factors to Consider Before Leasing an Industrial Rental Property

When searching for industrial buildings for lease, you have to take several interrelated factors into account. Here are five of the most important ones:

1. Location

The location of an industrial property is a critical consideration. Proximity to suppliers, customers, and transportation hubs can greatly impact operational efficiency. Access to major highways, ports, or airports is essential for logistics and distribution purposes. Additionally, it is crucial to ensure the chosen location complies with local zoning regulations and permits necessary for your specific business activities.

2. Size and Layout

Assessing the size and layout of an industrial property is crucial to meet your business requirements. Consider the space needed for manufacturing processes, storage capacity, and picking and packing operations. It is essential to evaluate the layout for optimal workflow, efficient material handling, and easy access to different areas of the facility. Furthermore, the chosen property should offer flexibility for future expansion or downsizing as your business evolves.

3. Special Requirements for Storage or Power

Depending on your business needs, specific requirements for storage or power may be essential. If storage is a critical aspect, ensure that the industrial property provides adequate capacity and suitable infrastructure for your inventory. Power requirements, such as high voltage or specialized equipment, should also be taken into account to support your operations seamlessly.

4. Usability and Accessibility

Industrial properties should be designed for usability and accessibility. Consider how well the layout and features of the property align with your manufacturing processes, including the flow of raw materials, workstations, and finished goods. Availability of loading docks, truck access, and sufficient parking space is crucial for smooth logistical operations. Not only that, but the property should be easily accessible for employees, deliveries, and transportation.

5. Infrastructure and Amenities

Infrastructure plays a significant role in the functionality of an industrial property. Assess the condition of the building and its systems, including electrical, water, and HVAC systems. Ensure that the property offers the necessary utilities to support your operations effectively. You’ll also want to consider amenities such as office spaces, breakrooms, and restrooms that contribute to a comfortable and efficient work environment for your employees.

Navigating the Leasing Process for Industrial Rental Properties

Now that we understand the key factors to consider, let’s delve into the leasing process for industrial properties.

  • Identifying the right industrial property: Utilize online resources, real estate agents, or industrial property specialists to identify potential options that meet your requirements. Conduct site visits and due diligence to evaluate the suitability of the properties.
  • Negotiating Lease Terms: Understand common lease structures for industrial properties and negotiate lease duration, rent, and renewal options that align with your business goals. Pay close attention to lease clauses related to maintenance, repairs, and improvements to ensure a fair and mutually beneficial agreement.
  • Legal and Financial Considerations: Engage with legal and financial professionals to review lease agreements, ensure compliance with regulations, and assess the financial impact of the leasing terms on your business. Legal experts can help navigate complex lease agreements, while financial professionals can provide insights into the financial implications and feasibility of the lease.

Best Practices When Leasing Industrial Rental Properties

To ensure a successful industrial property leasing experience, consider the following best practices:

  • Conduct a thorough needs assessment: Before embarking on the search for industrial property, conduct a comprehensive assessment of your business needs. Understand your space requirements, operational workflows, and future growth projections to guide your decision-making process.
  • Seek expert advice: Leasing industrial properties can be complex, so don’t hesitate to seek the expertise of professionals in the field. Work with experienced real estate agents or industrial real estate specialists who have a rich understanding of the market and can guide you through the leasing process.
  • Plan for future growth and flexibility: Anticipate your business’s growth trajectory and ensure that the chosen industrial property can accommodate future expansion needs. Flexibility in lease terms, such as the option to extend or renegotiate the lease, can provide you with the necessary flexibility to adapt to changing business requirements.
  • Engage in comprehensive due diligence: Thoroughly research and inspect potential industrial properties before making a decision. Look beyond the surface-level features and assess the condition of the building, its infrastructure, and any potential issues that may arise. Understanding the property’s history, maintenance records, and compliance with regulations is crucial to avoid any surprises down the line.
  • Review and understand lease terms: Carefully review all lease terms and conditions to ensure that they align with your business goals and requirements. Understand your rights and obligations as a tenant, including responsibilities for maintenance, repairs, insurance, and any restrictions on usage. Seek clarification from legal professionals if needed to ensure that you fully understand the lease agreement.

Simplify the Leasing Process With Hokanson Companies

Hokanson is your trusted partner in corporate brokerage services, specializing in the rental and sale of real estate for manufacturing and industrial businesses.

Navigating the world of industrial property leasing can be complex and time consuming. That’s where Hokanson comes in.

From tenant and landlord representation to acquisition and disposition services, we offer tailored solutions to meet your specific needs. With our years of industry experience and knowledge, we can help you find the ideal location for your manufacturing business and negotiate the best deal available. We are also well-versed in investment sales, ensuring that you maximize profits on property sales transactions.

Don’t leave your industrial property search to chance. Trust the experts at Hokanson to guide you through the process and secure the perfect location for your business. Contact us today to get started on finding the ideal industrial property that will propel your business forward!

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Jay B. Gehl

Vice Chairman of the Board
jbg@hokansoninc.com

Jay Gehl serves as Vice Chairman of the Board for Hokanson Companies, Inc. With over thirty-two years of experience, Jay has been directing and managing his team in the areas of strategic planning, corporate advisory, build-to-suit assistance, tenant representation, financial analysis of leases, and brokerage. Attention to detail and unparalleled customer service has been the foundation of the relationships with the institutional customers served by Hokanson Companies, Inc.

Jay has been instrumental in assisting several major corporations in establishing or relocating their corporate headquarters, including Vectren Corporation, Fifth Third Bank of Indiana, and Firestone Building Products. In 2005 and again in 2013, Jay was honored receiving Firestone’s Inner Circle of Quality Award. The prestigious “Q” Award is presented annually to a provider that demonstrates excellence in service, commitment, and innovation.

Jay and his team are the leading experts of medical real estate services in Indiana. No other firm in Indiana has the depth and countless years of experience in healthcare services. Hospital Administration and Physicians alike attest to the outstanding assistance they receive with build-to-suits, transactions and various projects.

Jay’s team excels in Investment sales with multiple transactions each year ranking them annually as a top producing entity. These services have helped corporate client’s real estate needs in over twenty-seven states from coast to coast. He also served the international needs of his clients in six countries including a facility in Turrialba, Costa Rica with 230,000 square feet on 35 acres.

Stephen P. Hokanson

Chairman of the Board and Chief Executive Officer, CRE, CPM, RPA
sph@hokansoninc.com

“We put our clients’ interests first… always.”

Steve Hokanson serves as Chairman of the Board and Chief Executive Officer of Hokanson Companies, Inc. He began with HCI in 1971, and has been its President and CEO since 1983. When Steve joined the organization, Hokanson Companies was primarily focused on property management. Under Steve’s leadership, Hokanson Companies has grown to include four active divisions and five separate disciplines.

HCI currently manages over 6 Million square feet under its property management division, and has over $100 million in project management and development. Its sales and leasing division closes over $100 million in sales and leases annually, while they continue to be very active in construction management for its various clients and out-of-ground buildings.

In addition to his role at HCI, Steve has also fulfilled numerous civic and professional leadership roles locally, statewide, and nationally, including the International President of BOMA International 1991-1993. Steve’s other accomplishments include being selected for the Stanley K. Lacy Executive Leadership Series, the Eagle Scout Silver Beaver Award, the National Distinguished Eagle Scout Award, named in Outstanding Young Men in America, and the Sagamore of the Wabash award, which is the highest award given in the State of Indiana by our Governor.

Steve Hokanson graduated from Indiana University in 1969 with a Bachelor of Science in Management and Administration. Steve is a licensed Real Estate Broker in the State of Indiana, and his designations include Counselor of Real Estate (CRE), Certified Property Manager (CPM), and Real Property Administrator (RPA).

Stephen J. Adams

Executive Vice President
sja@hokansoninc.com

“We strive to be accountable and responsible in always providing the best service to our customers.”

Stephen J. Adams graduated from Indiana University with a Bachelor of Science Degree in Management. After gaining experience from an internship at a locally-based real estate investment company, Stephen joined Hokanson Companies, Inc. in January 2000 as a licensed associate in the Leasing and Brokerage Division. Specializing in office, medical and industrial sales, and leasing, Stephen continues to build his professional portfolio while working on investment transactions, development, and consulting, as well as various other real estate projects.

Throughout his eighteen years of experience in commercial real estate transactions Stephen has developed business relationships with Nationwide Life Insurance Company, Healthcare Realty, The Sanders Trust, Sun Life Financial, Vectren Corporation, Energy Systems Group, Fifth Third Bank, Bradford Schools, Inc., DuPont Commercial Flooring, Lake City Bank, Firestone Building Products, National Bank of Indianapolis, Lacy Diversified Industries, Barnes & Thornburg, Otolaryngology Associates, Charles Schwab, First Financial Bank, Old National Bank, and the Indiana Bar Foundation, among others.

Continuing the company’s history as the premier medical real estate provider in Indiana, Stephen has developed relationships with Indiana University Health, American Health Network, Urology of Indiana, Otolaryngology Associates, Midwest Fertility Group, OrthoIndy and Indiana Nephrology, and Internal Medicines. He has also completed transactions for the following list of medical clients: CENTA, Indianapolis Gastroenterology and Hepatology, Balance Point, Whisper Hearing Centers, Anesthesia Consultants of Indiana, Methodist Sports Medicine, Rehabilitation Hospital of Indiana, Advanced Physical Therapy, Wishard Health, and Suburban Health Organization, among others.

Stephen devotes his time to various organizations including Fairbanks Indiana, Noble of Indiana, Penrod Arts Society, Youthlinks Indiana, the Hoosier Oncology Group, Junior Achievement, and the Governor’s Awards for Tomorrow’s Leaders. He is also a member of the Stanley K. Lacy Executive Leadership Series, Class XXXVII.

Boyd R. Zoccola

Chief Development Officer
brz@hokansoninc.com

“Your ideas become reality through our combined efforts.”

Boyd R. Zoccola serves as Chief Development Officer of Hokanson Companies Inc. With over 25 years of experience, he focuses his expertise on development of office and medical space, and corporate consulting. Boyd has been actively involved in the development of nearly $600 million worth of real estate, including client partners like IU Health, Springleaf Financial, Vectren Corporation, and Old National Bank.

Boyd’s industry involvement with The Building Owners and Managers Association (BOMA) is extensive beginning in 1994. He served as Chair and Chief Elected Officer of BOMA International, and has also served on the Executive, Finance, Medical, and Healthcare Facilities Committees. He also served and chaired numerous task forces along with being a panelist and/or speaker. Boyd’s BOMA Indianapolis experience includes positions as President, Vice President, Treasurer, Secretary, and multiple committee chairs. In addition, Boyd served as a Board Member of the Real Estate Round Table from 2011-2012.

Boyd graduated from Indiana University with a BA in Biology and is a graduate of the Stanley K. Lacy Leadership Series. Boyd has served the community through his involvement with Horizon House, Girls Inc., and the IYHA. He is a member of Second Presbyterian Church, Sigma Chi Alumni Association, Meridian Hills Country Club, and is an Indiana Real Estate Principal Broker.

Christopher M. Horsley

President and Chief Operating Officer
cmh@hokansoninc.com

“Working hard to make a difference to earn your business.”

Chris Horsley joined Hokanson Companies, Inc. in 1997 while completing his degree in Civil Engineering at Purdue University. Chris began his employment at Hokanson Companies in the construction area and in 2000 added Property Management to his responsibilities. Now as President and Chief Operating Officer, he focuses his efforts on construction, development, and property/facility management. Chris oversees a team of property and construction managers to provide management services to approximately 5M square feet in a 7-state geographical service area. Chris also works closely with multiple financial institutions to meet their bank branch real estate needs which includes a 140-branch system across a 3-state geographical area.

Chris graduated from Purdue University in 1999 with a Bachelor of Science in Civil Engineering. He holds a Professional Indiana State License for an Engineer in Training (EIT) and an Indiana Real Estate Broker and is a Certified Commercial Investment Member (CCIM). Chis is also involved with The Building Owners and Managers Association (BOMA) and is currently serving on the International Executive Committee and is the Secretary/Treasurer for BOMA Indianapolis.

Chris enjoys spending time, working in the business, being outside, riding motorcycles, exercising, playing golf, and being with his family.

Tony R. Townsley

Chief Financial Officer, CPA
trt@hokansoninc.com

“A great company has great people who are passionate about what they do! I am proud to be a part of the Hokanson Team, where we demonstrate that passion every day in helping our customers solve their Real Estate challenges.”

Tony Townsley serves as Chief Financial Officer of Hokanson Companies, Inc. Tony began with HCI in 2001, bringing with him 25 years of accounting and operations management experience including four years with Arthur Anderson. This vast knowledge has contributed to his success overseeing the corporate financial reporting, cash management, budget coordination, and year-end audit and tax responsibilities at Hokanson.

Tony graduated from Indiana University in 1985 with a Bachelor of Science degree in Accounting. He is a Certified Public Accountant, and was appointed by the Governor to serve on the Governor’s Council of Impaired and Dangerous Driving. Tony also served on the Wine and Spirit Wholesalers’ Board of Directors. Currently, he’s involved with the Merciful Help Center, and is an active member of Our Lady of Mt. Carmel Catholic Church.

Tony enjoys spending time outdoors with his family, camping, fishing, biking, and reading. Those same family values led him in publishing a children’s book titled “Three Cups”, which teaches children how to save, spend, and be charitable with their money. There are more than 50,000 copies of the book in distribution.