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Industrial and warehouse properties house manufacturing, distribution, and logistics operations. When your business occupies the building, owner-occupied CRE financing applies. SBA 504 and conventional loans are the primary tools for industrial real estate. E-commerce growth has increased demand for warehouse and distribution space, making industrial a favored asset class. This guide covers program options, typical terms, and how lenders evaluate industrial and warehouse properties.
Why Industrial and Warehouse Properties Are Financeable
Industrial real estate is considered essential infrastructure. Lenders understand manufacturing, distribution, and logistics as stable business uses. Owner-occupied industrial qualifies for SBA 504 (10% down, long-term fixed rates) and conventional CRE. The asset has clear utility and, when owner-occupied, strong alignment between the business and the real estate. See SBA loan for owner-occupied commercial property and logistics and warehousing business financing.
SBA 504 for Industrial and Warehouse
SBA 504 fits owner-occupied industrial well. Structure: 50% bank, 40% CDC, 10% borrower. You put 10% down and get 20–25 year fixed rates on the 504 portion. SBA 504 can finance acquisition, construction, and renovation. Manufacturing and warehouse uses are explicitly eligible. See SBA 504 vs conventional CRE.
Conventional CRE for Industrial
Conventional lenders finance industrial for qualified borrowers. Typically 20–30% down. Terms of 5–25 years. Strong credit and business cash flow support approval. Industrial may have specialized features (clear height, cranes, heavy power) that affect value and underwriting. See what credit score is needed for a CRE loan.
Property Types: Manufacturing vs Warehouse vs Flex
| Type | Typical Use | Financing Notes |
|---|---|---|
| Manufacturing | Production, assembly | May have specialized build-out; SBA 504 common |
| Warehouse / distribution | Storage, fulfillment, logistics | Clear height, docks important; both SBA and conventional |
| Flex / R&D | Office-warehouse hybrid | Mixed use; may have office component |
Key Property Metrics Lenders Evaluate
For industrial and warehouse, lenders consider:
- Clear height: Ceiling height for storage and equipment. Higher clear height generally supports value.
- Dock doors and truck courts: Loading capacity affects functionality and rentability.
- Location: Highway access, labor market, proximity to customers or suppliers.
- Power and utilities: Ample electrical, HVAC for manufacturing or cold storage.
- Environmental: Phase I assessment; contamination can affect financing.
See what lenders look for in a CRE loan.
Bridge Loans for Industrial
When timing is urgent, bridge loans close in 7–21 days. Use bridge to acquire, then refinance into SBA or conventional. See bridge loan for commercial property acquisition.
Typical Down Payment and Terms
SBA 504: 10% down. Conventional: 20–30%. Bridge: 25–35%. See down payment for commercial property loans.
Build-to-Suit and Construction
SBA 504 and conventional programs can finance build-to-suit industrial. Construction loans fund the build; permanent financing pays off at completion. Some lenders offer construction-to-permanent. Discuss with your lender. See manufacturing business financing.
Environmental Considerations
Industrial sites may have environmental history (prior manufacturing, storage). Lenders typically require a Phase I environmental assessment. Contamination can affect value and financing. Address any issues before closing.
Bottom Line
Industrial and warehouse properties are readily financeable through SBA 504, conventional, and bridge programs. Owner-occupied industrial gets favorable terms. Prepare business financials, property details, and a clear use of funds. Get matched with CRE lenders for industrial and warehouse, or explore commercial real estate loan options.