Industrial Real Estate - Proximity and Scarcity
They aren’t making any more land but we still need locally based services.
In fact, the more people living in an area, the more painters, plumbers, mechanics, tree-services, caterers and other service uses an area will require. Affluent people are also entrepreneurial people; I’ve seen them in the market renting industrial space for their start up catalog ventures, or luxury businesses like collector wine wholesaling or even artist studios(I’ve rented industrial space to successful artists and costume designers among other creative enterprises)
As a city urbanizes, the supply of industrial space supply comes under pressure. Initially, as it becomes more profitable to move industries to lower cost regions,(often due to high taxes cities impose and long commutes for workers looking for more affordable housing) buildings formerly used for manufacturing and distribution become come on the market. Much of that supply gets converted into multi-tenant buildings.
Eventually, that hidden supply flow from conversion ends. All those old factories have been turned into retail centers, office buildings, apartment buildings, with only a portion turned into multi-tenant buildings.
In affluent suburbs there will be additional shrinking of supply as some industrial buildings are converted to retail uses such as carpet retailers or party supply and warehouse stores. Some low density commercial sites might even see redevelopment into residential housing.
Limited supply, Growing Demand - leads to Higher Rents, more income, and more Value.
At the same time you even own one of the lowest maintenance types of investment properties!
Read more detailed explanation of the subcategories in the articles below. (They also contain details of my personal experience)