The office building and industrial property sectors are two of the most economically sensitive sectors of real estate there are. Business will contract or expand in each sector depending on the state of the economy. Office space, even in premium locations, can remain empty in a sour economy for considerable periods of time. Industrial space can be influenced by many factors in the economy ranging from tax policy to plain old simple demand and supply.
These two sectors are also unique in that you have a number of owner users and pure investors. A company can buy an industrial property for its own use, and an investor can buy an office or industrial property for a pure investment play to lease back to a third party business. Many business owners prefer to lease so that if they expand or contract they are burdened with the additional headache of vacant property.
Office and industrial can be a good, long term cash flowing investment if the projects are structured correctly. However, if the economy turns, they are the first properties to feel the effects as business pulls in its spending and moves to cut employees and overhead. As capacity needs wane in manufacturing and distribution, industrial properties will begin to feel the effects of economic slowdowns. National and international economic trends will influence these two sectors more than other sectors of real estate.
As these two sectors are very specialized, a specialist in these markets is recommended for buying or leasing needs. The markets change weekly in pricing and demand, and a competent commercial broker or leasing agent can advise you on your best options. We have access to very fine office and industrial specialists in our database that can guide you to your best choice for you investment or business needs.