Industrial property assessments
What is an industrial property?
An industrial property is predominantly designed for warehousing and distribution of product, or processing and manufacturing of product. These properties generally have limited interior finishes, though they do commonly include a small amount of office or retail space. Industrial properties are typically valued using the Sales comparison or Cost approach.
Types of industrial properties
Industrial Properties are grouped into the following categories:
| Categories | Description |
|---|---|
| Single Tenanted Warehouses | Properties with one or two bays |
| Multi-Tenanted Warehouses | Properties with three or more bays |
| Multi-Building Warehouses | Properties with multiple buildings on a single parcel (excludes outbuildings) |
| Industrial Condominium | Individually titled unit in an otherwise typically designed industrial building |
| Outdoor Storage | Largely land with some outbuilding improvements that have minimal contributing value (example: Quonsets) |
| Self-Storage | Mini-mall style self-storage facility, small storage units designed to be rented out individually |
| Extracting | Land and improvements are typically purpose built and support the processing of different products |
| Manufacturing | Improvements are typically purpose built and support the manufacturing of products |
| Processing | Improvements are typically purpose built and support the processing of products |
How are industrial properties assessed?
- Sales comparison approach to value: Industrial properties are typically assessed using the sales comparison approach to value (also known as the direct comparison approach to value). This approach compares the characteristics of each property to similar industrial properties that have sold.
- Cost approach to value: The cost approach includes the depreciated replacement cost of an improvement and the estimated land value. This approach is used for industrial properties that are unique, purpose-built, or have limited market data, such as greenhouses. The replacement cost is calculated using industry standard construction cost data, with depreciation and GST removed, while the land value is based on sales of similar parcels within Calgary.
- Land value: Industrial properties may be assessed based on the underlying land value if the value of the vacant land exceeds the value of the improved property. As a result, the land value more accurately represents market value. Land values are derived using the sales comparison approach to value described above.
Some market factors that may influence the value of an industrial property are:
- Assessable area
- Finished area
- Land use designation
- Location
- Outbuilding
- Site coverage
- Tenancy
- Year of construction
To learn more about real estate market trends, our valuation methodology, and industrial sales transactions please download the Industrial Market Trend Report.