Industry
Part of Industrial space: costs, choices and current rules
Industrial space examples: lessons and useful context
Nine industrial space situations, from a rack module that missed the grid to sprinklers designed for something else, and the question each one skipped.
The situations below are invented to show how industrial buildings fail their tenants. None describes a real company, landlord or site. Each is a mechanism: a mismatch between the operation and the building, or between the operation and the address, that was discoverable before signature.
What to take away
- Industrial problems are physical or regulatory, and neither is fixed by negotiation after the lease is signed.
- The building's documents, the utility, the fire authority and the planning office each hold one piece of the answer, and nobody in the deal collects them for you.
- Almost every case below turns on a question that costs nothing to ask and a great deal not to.
1. The rack module that did not fit the grid
Suppose a distributor takes a building on floor area alone. Their racking module, rack depth plus aisle, does not divide into the column spacing. In every bay there is a strip that holds nothing. The building holds far fewer pallets than the area suggested.
What it shows: bring the layout to the building, not the building to the layout. Column grid and clear height, taken together, decide the real capacity, as explained in industrial space.
2. The sprinklers designed for something else
Suppose a tenant storing packaged plastics moves into a warehouse whose sprinkler system was designed for palletized paper at a lower height. The insurer surveys the building after signing and declines to write the policy on the expected terms. The fire authority asks for in-rack protection before occupancy, measured against a design standard such as NFPA 13.
What it shows: the sprinkler system is compatible with a commodity class and a storage height, not with "warehousing". Have a fire protection engineer and the insurer look at the design before the lease, with your inventory described.
3. The power that was already spoken for
Suppose a food processor leases a unit in a multi-tenant building on the strength of the incoming service size. The utility later confirms that most of that capacity is committed to the neighboring tenant's refrigeration. An upgrade is possible, on a timetable longer than the fit-out.
What it shows: incoming service and available service are different numbers. Ask the utility, in writing, what is spare and how long an upgrade takes.
4. The yard that was not permitted
Suppose a contractor takes a unit with a large yard and stores plant, containers and skips there, as the previous occupant did. A notice arrives from the municipality: outdoor storage in that district requires a conditional approval and screening, and the previous occupant never had it.
What it shows: yard use is often a separate line in the use table from the building's use. A previous tenant's practice proves nothing. How to ask the planning office, and what to keep from the answer, is set out in zoning and permits.
5. The trailer that could not turn
Suppose a tenant counts dock doors and takes a building with more than they need. The first delivery arrives on a full-length trailer. The truck court is too shallow to back in without a shunt, and the entrance radius forces the truck to swing across the neighbor's frontage. Deliveries now depend on the neighbor's goodwill.
What it shows: doors are useless without a court that fits the vehicles that actually call. Walk the route with the largest vehicle in mind, and watch a delivery if you can.
6. The floor that was fine for a forklift
Suppose a tenant plans narrow-aisle storage with turret trucks to raise capacity. The slab is sound and level enough for a counterbalance truck, but its flatness is outside what the turret trucks tolerate. The equipment cannot be run at height without a floor grinding program.
What it shows: floor flatness is a specification, and narrow-aisle equipment is intolerant of floors that suit ordinary trucks. Have the floor surveyed if your equipment is sensitive.
7. The mezzanine at the end of the term
Suppose a tenant installs a mezzanine and a rack system over a long term. The lease requires the premises to be returned to their original condition. At expiry, the landlord's schedule includes removal of the mezzanine, making good the slab fixings, and repainting. The removal costs more than the installation did.
What it shows: settle the surrender obligation for anything you install at the start. The principles on who owns what at the end of a fit-out are in tenant improvements.
8. The stormwater from the yard
Suppose a tenant washes vehicles in the yard and stores materials that shed residue when it rains. A regional inspector asks for the site's stormwater permit. There is none. The activity in the yard is an industrial discharge under rules the tenant never considered. The federal framework is described on the EPA's stormwater program page, and its application to a particular site is a matter for the state or regional authority.
What it shows: what leaves the yard is regulated, and the obligation is the operator's. Ask the environmental body what your activity requires.
9. The roof that became your cost
Suppose a tenant signs a net lease whose repair clause makes the tenant responsible for "the premises", with the roof included in the definition. Two winters in, the roof needs replacement. The landlord's position is that it is the tenant's obligation.
What it shows: roof and structure should sit with the landlord, and the definition of the premises should say so. Read the allocation, not just the rate; the general rules are in commercial leasing.
What the nine have in common
| Situation | Who could have answered | When |
|---|---|---|
| Rack module | Material handling designer | Before the tour |
| Sprinklers | Fire protection engineer, insurer | Before the lease |
| Power | The utility | Before the lease |
| Yard | Planning office | Before the offer |
| Trailer | Your own walk of the route | On the visit |
| Floor | Floor survey | Before committing to equipment |
| Mezzanine | Your lawyer, at drafting | Before signature |
| Stormwater | Environmental body | Before the offer |
| Roof | Your lawyer, at drafting | Before signature |
None of the answers came from the landlord or the listing. That is the pattern.
Common questions
Are these real cases?
No. They are constructed to show mechanisms that recur. The businesses, buildings and figures do not exist.
Which of these is hardest to recover from?
The sprinkler mismatch and the yard prohibition, because both can make the building unusable for the operation, and the lease does not release you.
Should I hire an engineer before I have a shortlist?
Engage one when a building reaches the shortlist, with your operation's numbers. Their opinion on two or three candidates is far cheaper than a lease you cannot use.
What is the cheapest check on this list?
Walking the truck route. It costs an hour, and it rules out buildings that look perfect on a plan.