How to Value Your Industrial Building in NC & SC: A Seller’s Checklist

“What’s my building worth?”

I get this question constantly. And honestly, the answer is almost never what people want to hear. Not because their building isn’t valuable. It usually is. But because most owners are comparing it to stuff they saw on LoopNet or what their buddy got for his warehouse in 2021. Different world now.

Look, I’ve bought over a hundred properties across the Carolinas, about twenty of them commercial. Here’s how I actually figure out what to pay.

Start with the rent roll

If there’s tenants in the building, this is where it starts. What are they paying? When does the lease end? Are they actually good tenants or just warm bodies?

I had a guy tell me last year his building was “fully leased at market.” Pulled the rent roll and two of his four tenants were on month-to-month holdovers at $6.50 NNN. Market was closer to $10. So yeah, technically leased. But the income it was throwing off was way below potential. That matters.

I take net operating income – the real number, not the broker’s fantasy pro forma – and divide by a cap rate.

That’s it. Value = NOI / Cap Rate.

Cap rates I’m seeing right now:

• Small-bay, contractor garages: 7% to 8.5%
• Flex industrial: 7% to 9%
• Newer single-tenant: 6.5% to 7.5%

And I don’t give credit for future rent increases. Your leases are below market? Cool, that’s upside for me. But I’m not paying you today for rent bumps that might happen in 18 months. When those leases actually roll, sure. Until then it’s today’s income.

If it’s empty, the math flips

Vacant buildings get valued backwards. I figure out what it’ll earn stabilized, then subtract everything it takes to get there. TI costs, commissions, carrying costs, dead time while I’m finding tenants.

Had a situation in Rock Hill. 10,000 SF flex building, completely empty. Owner wanted $1.4M because “that’s what the one down the street sold for.” Right, but that one was full. His needed $50K in tenant improvements plus six months of carry before a single rent check showed up. We ended up around $1.15M. He wasn’t thrilled but the math is the math.

The building matters (more than people think)

Ceiling height under 12 feet? That’s a problem. Kills half your tenant pool immediately. No drive-in door? Another chunk gone.

Here’s the thing about roofs though. A 25-year old roof doesn’t make the building worthless but it does mean I’m deducting $8-12/SF for replacement. On a 15,000 SF building we’re talking $120K-180K. That’s not a negotiation tactic, that’s money I’m actually going to spend. Paving’s another $4-6/SF. HVAC, electrical, lighting. It adds up fast.

Location (still the biggest factor, honestly)

I-85 frontage near Charlotte is a completely different value than a back road in Kings Mountain. Same building, same square footage, wildly different price. That’s just reality. Tenant demand drives rent, rent drives NOI, NOI drives what I can pay.

I also check replacement cost as a gut check. Building new in the Carolinas runs $130-150/SF right now (which is insane, by the way). So if your older building is well maintained, it probably trades at 60-80% of that. Gives me a floor.

What should you actually do with this info

Pull your rent roll. Add up your actual expenses. Not what you told your accountant — the real number. Look at what your roof and parking lot need. That’ll get you in the neighborhood of what a buyer would pay.

704-600-3839