Once a deal passes the numbers test, the next step is getting in the car and actually looking at the building.
I've gotten better at this over time. The first few site visits I did, I mostly looked at what the broker pointed me toward. Now I have a list of things I check regardless of what the broker says, because these are the items that either kill a deal or change the terms.
Here's what I'm looking at.
Clear height
This one matters more than most people think. Clear height is the usable vertical space inside the building. It’s measured from the floor to the lowest obstruction (usually a beam or the roof structure).
A building with 16-foot clear can accommodate most small business tenants: contractors, e-commerce fulfillment, light manufacturing. A building with 24-foot clear opens up a broader range of tenants, including ones who stack product high or use equipment with vertical reach. For the smaller spaces that I’m usually targeting 12-14 feet is a good height to target. Anything over 18 is typically for bigger spaces and different uses altogether.
I check this on every building, even when the listing quotes a number, because the numbers are sometimes wrong.
Roll-up doors
Count them, check their condition, and note whether they're dock-height (raised platform) or grade-level (flush with the parking lot). Most small industrial tenants want grade-level doors because they're loading cargo vans and pickup trucks, not 18-wheelers.
Also check the width. A 10x10 door is standard and fits most uses. A 12x14 opens up more tenant types. An 8x8 door in a building you plan to lease to contractors or fabricators is going to come up in every single tenant conversation.
Electrical
If your plan involves multiple tenants or subdividing, the first question is whether there are separate electrical meters for each unit. Shared meters create billing headaches and are a dealbreaker for certain tenant types.
The second question is amperage. Light users (storage, basic fabrication etc) can work with 100-200 amps. Auto shops, welders, and anyone running heavy equipment will want 400 amps or more. Ask what's there, and if the answer is vague, find the panel yourself.
Parking
Walk the lot. Check the surface for cracked asphalt or any other possible repairs. Figure out whether there's room for trucks to maneuver. Parking spaces are not super important (these aren’t retail buildings where lots of customers are coming through), but there should be a few spots per unit at least. If there’s any yard space for outdoor storage that can be a plus. You’ll want to check with the city on zoning to confirm whether that is allowed or not though too.
Bathrooms
I've walked buildings where there's one bathroom total for the entire footprint, or where the bathroom is positioned in a way that makes it unusable if you subdivide. If you're planning multiple tenants, you need multiple bathrooms or you need to budget for adding them. You can also get away with shared restrooms among units as long as they are reasonably accessible.
Office space
Most small industrial tenants want some office: a place to do invoicing, meet clients, store paperwork. But too much office is its own problem. If 40% of the footprint is finished office space, you're paying per square foot for space your tenant pool can't use. I look for somewhere between 10-15% of total footprint. And for smaller spaces, sometimes no office space is fine too.
The question I'm asking throughout
Everything on that list comes back to one thing: will a tenant actually want to use this space? A building can pencil beautifully on a spreadsheet and still sit vacant for two years because the clear height is too low or the parking is a mess. The site visit is where you pressure-test the numbers against physical reality. Try to put yourself in the tenants shoes. Also think about where this building sits within other buildings available in the market. Is this one of the nicer buildings available? Maybe you’d pay a premium for it. Or maybe its not as nice as others, so you’re looking for a discount. The quality of the building will often dictate the quality of the tenant and what they are willing to pay. There isn’t any right or wrong here, but you need to know where you are in the market.
If you're putting together your own process, the Concrete Returns Value Add Playbook covers physical inspection alongside the financial and legal due diligence steps.
Javi