Ep 63: Industrial Real Estate with Chad Griffiths
Industrial Real Estate has proven to be resilient and reliable for cash flow. Yes, there are drawbacks, as in every other asset class, but having a good understanding of the property will help the investor mitigate the risks and succeed in this type of investment.
In this episode, Chad Griffiths will give us the pros and cons of industrial real estate from two standpoints – that of a broker and an investor. He’ll tell us what to watch out for in the due diligence, the basic requirements in acquiring an industrial property, the common mistake investors new to this class make and how to avoid it. Listen now!
💥💥 Remember, this is your MBA. Have a notepad handy, and get ready to take some 📝 notes!
Key Points from This Episode:
Why Chad prefers industrial real estate over other asset classes like multifamily and self-storage.
What makes industrial real estate special, from a broker’s standpoint?
What are the benefits of investing in industrial real estate?
What are the drawbacks?
The importance of leases in due diligence – red flags and strengths.
What is the biggest risk in industrial real estate investment?
How Chad mitigates risks.
The length of term for leases that operators try to achieve.
Looking at the obsolescence of the property.
Due diligence on buying a property.
Basic requirements for an industrial property.
Common mistake of new investors – buying based on cash flow.
Is it crucial to have a broker when investing in industrial real estate?
Chad’s advice for those interested to invest in industrial real estate.
Tweetables:
“Go through the exercise of determining what that building is worth if it were vacant.” – Chad Griffiths
“Generally speaking, the larger the company, the more aggressive that they’re going to be on the lease rate.” – Chad Griffiths
“If you don’t have a plan for what that property is worth when it’s vacant, it can destroy a lot of wealth.” – Chad Griffiths
“This (industrial real estate) isn’t a hands-off investment vehicle unless you’re going the syndicate road and you’re just going along as a limited partner. If you want to actively own industrial real estate, you need to be fully engaged with it.” – Chad Griffiths
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