Before You Lease Industrial Space, Test Whether the Building Can Support the Operation

The rent, location and square footage may work. Power, loading, floor capacity, HVAC, zoning and site logistics determine whether the business can.

Originally published November 2013. Updated October 2026 to reflect current owner-side industrial leasing and due-diligence considerations.

The building has the square footage.

The rent works.

There are loading docks.

The broker’s plan shows plenty of room for the operation.

Can the business actually operate there?

That’s a different question.

An industrial building isn’t interchangeable space. What works for storage may not work for manufacturing. What works for conventional distribution may not support automation. A building that accommodated the previous tenant may require substantial investment to accommodate the next one.

Before committing to an industrial lease, I would want the project team to test the building against the actual operation, not a generic industrial-space checklist.

Start With the Operation, Not the Building

Industrial due diligence should begin with what the business intends to do inside and outside the building.

• What will be stored or manufactured?
• What equipment will operate there?
• How much power will it require?
• What vehicles will arrive and how frequently?
• How will material move from receiving through the operation and back out the building?
• How much storage height is required?
• How many employees and shifts will the facility support?
• Are there unusual ventilation, temperature, process, utility or life-safety requirements?
• Is future growth expected?

Those answers become the basis for evaluating the property.

Otherwise, it’s easy to tour a building and ask whether it has docks, power and HVAC without determining whether it has the docks, power and HVAC your operation requires.

Loading Docks Are Only Useful If Trucks Can Reach Them

A listing may say the building has six loading docks.

That tells me very little about whether those docks work for the intended operation.

I want to understand the trucks using them.

• Can the expected tractor-trailer configuration enter the property, maneuver and back into the dock?
• Is there sufficient truck court depth?
• Are there turning or circulation conflicts?
• What are the dock heights and door dimensions?
• Are dock levelers or other equipment appropriate for the vehicles being served?
• Is trailer parking required?
• Will employee parking interfere with truck movements?
• Are there restrictions on truck routes, delivery hours or site access?

An older industrial property may have operated successfully for decades and still be poorly suited to the equipment and logistics of a new tenant.

Don’t count docks. Test the operation.

Verify the Power Before You Need It

Electrical capacity deserves much more attention today than it did when I originally wrote this article in 2013.

Automation, robotics, process equipment, material-handling systems, IT infrastructure, EV charging and other loads can materially change the electrical requirements of an industrial operation.

Seeing electrical panels during a tour doesn’t answer the question.

I would want the appropriate professionals to determine the available service, voltage, capacity, distribution and condition of the existing system—and compare that with the anticipated connected and demand loads.

If additional utility capacity is required, determine whether it is actually available and what it will take to obtain it.

That last point matters.

A project can have money in the budget for an electrical upgrade and still have a schedule problem if the required utility work, transformers, switchgear or other equipment cannot be delivered when the business needs to occupy the facility.

“We can upgrade it” isn’t the same as “we can have it when we need it.”

Understand What the HVAC System Actually Serves

Many industrial buildings don’t provide the same heating and cooling conditions throughout the facility.

Office areas may be fully conditioned while warehouse or production areas have entirely different systems—or limited conditioning at all.

Start with the operational requirement.

• Does the business merely need freeze protection?
• Employee comfort?
• Temperature-controlled storage?
• Humidity control?
• Process cooling?
• Ventilation or exhaust?

Then determine what the existing building provides.

I would also want to know the age and condition of the equipment, its maintenance history and what responsibilities the proposed lease assigns to the tenant and landlord.

The original version of this article suggested negotiating for the landlord to replace failed HVAC equipment.

I wouldn’t make that a universal rule.

The important issue is that the allocation of repair, maintenance and replacement responsibility is understood and negotiated before the lease is signed.

An old rooftop unit doesn’t become less old because the lease says the tenant is responsible for it.

Clear Height Is Only Part of the Storage Question

A high clear height can be extremely valuable.

It doesn’t automatically mean the tenant can use all of it.

If the operation depends on high-bay racking, the team may need to consider rack configuration, sprinkler protection, commodity classification, aisle dimensions, material-handling equipment, slab conditions and applicable fire and building requirements.

The floor matters too.

A warehouse slab that worked perfectly well for one operation may not meet the loading, flatness or levelness requirements of another.

That’s particularly important where specialized lift equipment, narrow aisles, tall racks or concentrated equipment loads are planned.

So instead of asking:

“How high is the ceiling?”

I would ask:

“How much of that height can our operation actually use?”

Confirm Floor Capacity Before Installing the Load

The original article included floor load as one of its 13.5 items.

It deserves more than a line.

Storage racks, manufacturing equipment, mezzanines, compact storage systems and other concentrated loads can impose demands that ordinary warehouse use did not.

Don’t assume that because something physically fits on the floor, the structure can support it.

Where the operation creates meaningful loads, have the appropriate structural professional evaluate the existing construction and proposed use.

The same applies to roofs when new mechanical equipment, solar installations or other significant loads are contemplated.

Zoning Is More Than the Word “Industrial”

The building may look perfect for the business.

That doesn’t mean the intended use is permitted.

Confirm zoning and land-use requirements for the specific operation.

Manufacturing, warehousing, distribution, vehicle-related uses, outdoor storage, food production, laboratories and other industrial activities may be treated differently.

Then look beyond basic use permission.

• Are there restrictions affecting outdoor storage?
• Truck circulation?
• Parking?
• Signage?
• Hours of operation?
• Noise?
• Hazardous or regulated materials?
• Process exhaust?
• Waste handling?

The question isn’t whether the property is called industrial.

It’s whether your operation can legally function there as intended.

Understand the Existing Building Before Pricing the Build-Out

A prospective tenant may focus heavily on the improvements it plans to construct.

I also want to know what it is inheriting.

• Roof condition.
• Building envelope.
• Slab.
• Fire protection.
• Electrical distribution.
• Mechanical equipment.
• Plumbing and drainage.
• Loading equipment.
• Site paving.
• Lighting.
• Doors.
• Life-safety systems.
• Accessibility.

Deferred maintenance can become a project issue very quickly when responsibility for it hasn’t been established before lease execution.

This is also where lease language and physical due diligence have to meet.

If the landlord is delivering certain systems in working condition, define what that means and determine how it will be verified.

If the tenant is accepting existing equipment, understand its condition and remaining useful life.

Don’t Ignore the Site

The operation doesn’t stop at the exterior wall.

Employee parking, truck circulation, delivery staging, trailer storage, emergency access, drainage, snow storage, security and neighboring uses can all affect how an industrial property functions.

Visit the site with the operation in mind.

Better yet, look at it when the facility would actually be busy.

A truck court that looks enormous during an empty Sunday tour may feel very different with trailers at the docks, employees arriving for a shift change and vehicles waiting at the entrance.

Think About What Happens If the Business Grows

A building may meet today’s requirement and constrain tomorrow’s.

If growth is part of the business plan, ask what expansion actually means.

• More employees?
• Another production line?
• More storage?
• Additional power?
• More loading positions?
• Outdoor equipment?
• Another shift?
• Adjacent space?

Then determine whether the property can accommodate it.

A neighboring vacancy isn’t an expansion strategy unless there is a realistic path to obtaining and connecting that space when it is needed.

Put the Due Diligence Before the Commitment

Some building deficiencies can be corrected.

That doesn’t mean they should be discovered after the lease is signed.

If the operation requires an electrical upgrade, additional HVAC, structural reinforcement, sprinkler modifications, loading changes or significant site work, those improvements can affect:

Cost.

Schedule.

Lease negotiations.

Landlord contributions.

Permitting.

Business continuity.

And potentially whether the building should remain under consideration at all.

That is why I would bring the appropriate real estate, design, engineering, operations, legal and project professionals into the evaluation before the transaction becomes difficult to unwind.

The Building Doesn’t Have to Be Perfect

Few existing industrial properties will match every requirement without modification.

That’s not the test.

The question is whether the gaps between the existing building and the required operation are known, solvable, affordable and achievable within the business schedule.

A lower rent doesn’t compensate for inadequate power if the required capacity can’t arrive for 18 months.

An extra loading dock doesn’t help if the trucks can’t maneuver into it.

Thirty-six feet of clear height doesn’t create useful storage if the rest of the building can’t support the rack configuration.

And enough square footage doesn’t make a building suitable if the operation isn’t permitted there.

Before signing the lease, I would want leadership to be able to answer one question with confidence:

Can this building support the business we’re planning to put in it?

That’s the due-diligence test that matters.