Practically every major city in the U.S. has an area of dilapidation from a once-booming WWII-era industrial center. In many areas, these stone and brickwork buildings have sat for years uninhabited while newer more modern buildings were built further out in the suburbs and surrounding areas.
Today, the reverse is true. Now, these once-loved industrial sites are being targeted by developers, city planners, and commercial real estate agents for creative redevelopment. What these cities are seeing is a symbiotic relationship that adds up to a win-win for both sides.
A recent study conducted by the Arcadia Urban Land Restoration Index surveyed former industrial centers that are or were in disrepair in over two dozen cities. What they found was that New York City topped the list of cities ripe for investment in industrial spaces.
5. San Francisco
When investment in these industrial sites comes in, new businesses follow — as does new residents looking for residential space. That is in fact what many developers in this market are doing – converting former warehouses and factories into apartment buildings, business offices, and retail centers.
Measured by Potential for Dynamic Growth and Low-Cost Redevelopment
Measured by the potential for “dynamic growth,” the city’s economic strength, and the low cost to rehabilitate crumbling infrastructures, the Urban Land Restoration Index gave NYC high marks for both commercial and industrial real estate opportunities.
NYC’s Remediation department responsible for instituting the programs that are producing this investment boom estimate that there is the potential for investors to contribute over $2 billion to the city’s economy, more housing, and thousands of jobs.
What Makes These Cities Most Attractive for Investing in Industrial Space?
Why are so many investors eyeing these markets for industrial sites that have languished on the market for decades? For one, distressed industrial sites often sell for multiple times less than newer properties of the same size.
Many older industrial buildings are built so sturdily that they often exceed even the requirements for today’s building codes. Even if you take into account the costs for remediation including electrical wiring, asbestos removal, structural repairs, and more, these buildings take much less to restore for reuse.
On top of that, these properties are large enough to house multiple businesses and housing units. Whether you are converting an industrial site into a new luxury condo development or you are looking at an old baked goods manufacturing complex to convert to a business complex, these properties are extremely adaptable for countless uses.
Help Finding Industrial Space that’s Prime for Investing
Finding suitable industrial space for your clients is not always easy. Not all cities are as accommodating and red tape can delay projects for a decade or more. But the payoff is a win-win for all.