Selling an Industrial Building with Deferred Maintenance

Let me be upfront about something. I buy buildings that need work. That’s kind of my whole thing. So if you’ve been putting off the roof or the parking lot or the electrical panel is from 1987, I’m not going to walk away from the deal. I’m just going to price it in.

But a lot of sellers don’t know how buyers actually handle deferred maintenance. They think one bad report kills the deal. Or they think they should fix everything before selling to maximize value. Both wrong. Let me explain how I actually look at it.

The roof

Always the big one. I see a lot of industrial buildings in Greenville and Charlotte where the roof is original from the early ’90s. Thirty years on a flat roof. It’s probably leaking somewhere. Maybe the owner’s been patching it.

Here’s my math: full replacement runs $8-12/SF on a single-ply membrane. On a 20,000 SF building that’s $160K-240K. But I don’t always need a full replacement. Sometimes a coating or overlay at $3-5/SF buys another 10 years. Depends on the substrate and how bad the existing membrane is. Point is, I have options. And I know the actual costs because I’ve been through this plenty of times between my commercial and residential deals.

Paving

A cracked, potholed parking lot looks terrible but it’s a known cost. Mill and overlay runs $4-6/SF for asphalt. Full tear-out and replace is more like $7-9/SF. On a 10,000 SF parking area that’s $40K-90K depending on what it needs. Not fun but not a dealbreaker.

HVAC and electrical

Older industrial buildings often have rooftop units that are 15-20 years old. Replacement is $5-8K per ton depending on the size. A 5-ton unit for a small office section? $25K-40K. Most industrial buildings don’t need much HVAC though. The warehouse is unconditioned. It’s really just the office portion.

Electrical is one people forget about. A building with 200 amp single-phase service is limited. A lot of industrial tenants need 400 amp three-phase minimum. An electrical upgrade can run $30K-60K depending on what the utility requires. I’ve done a few of these and they’re always more expensive than you expect.

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My advice? Don’t fix it.

Seriously. Don’t go spend $200K on a new roof right before you sell. You’ll never get that money back dollar for dollar.

Instead, sell it to me as-is. I know what everything costs. I’ll deduct the capital items from my offer and give you a clean number. No surprises during due diligence because I’ve already factored it all in.

The alternative is listing it with a broker, having every buyer’s inspector find the same issues, getting beaten up on price during negotiations, and closing three months later than you planned. I’ve watched that happen to sellers and it’s painful.

I can close in 30-45 days. As-is. I don’t care if the roof’s shot or the lot looks like the surface of the moon. I just need to know about it upfront so I can price it right.

704-600-3839. Happy to take a look.