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May 7, 2024

Investing in Industrial Real Estate with a Self-Directed IRA

Key Points 

  • Investing in industrial real estate has the potential to take your retirement savings strategy to new heights.
  • You can diversify your retirement portfolio, generally hedge against inflation, and enjoy relatively predictable returns.
  • With Broad Financial, it’s easy to invest in industrial real estate through a Self-Directed IRA (SDIRA) with Checkbook Control.
A prospective investor is interested in real estate investing, particularly in regard to industrial real estate.

A Self-Directed IRA (SDIRA) can give you the chance to invest beyond Wall Street in various alternative assets, such as industrial real estate. If you’re well-versed in industrial real estate or have a great deal of experience in it, this strategy can be a game change for your retirement strategy. Let’s dive deeper into investing in industrial real estate with a Self-Directed IRA.

What is Industrial Real Estate?

A storage facility is a prime example of a solid example of an industrial real estate investment.

Industrial real estate falls under the commercial real estate umbrella. It involves land and buildings that support industrial activities, like the research, production, manufacturing, warehousing, storage, and distribution of consumer goods. Industrial real estate properties are often associated with durable floors, high ceilings, and a number of loading decks that allow for the loading and unloading of goods. They typically focus on function in design over aesthetics.

Types of Industrial Properties

There are a variety of industrial real estate properties, including:

Manufacturing Facilities

Manufacturing facilities are the most popular types of industrial properties. Heavy manufacturing properties are usually more than tens of thousands of square feet and include large loading decks, heavy machinery support, and ample electrical power. While light manufacturing facilities are smaller, they’re more flexible and geared toward basic manufacturing and light assembly.

Storage and Distribution

Storage and distribution properties are buildings that are intended for the storage and shipment of products. They’re typically situated close to airports to allow for quick delivery, no matter where the end users are located. Most of their square footage is dedicated to storage space but there may be a small part reserved for office space.

Flex Space

Flex properties are exactly what they sound like: flexible. They may be reserved for data centers, showrooms, or research and development. Data centers are usually at least 100,000 square feet and built with special wiring and security systems. Showroom properties, like car dealerships, are a mix between warehouses, showrooms, and offices. Research and development buildings, which feature labs and testing spaces are designed to create, test, and improve products.

What is a Self-Directed IRA?

A Self-Directed IRA is similar to a standard IRA. You can transfer, roll over, or contribute funds to it to potentially grow your retirement savings. The difference between a standard IRA and a Self-Directed IRA, however,  is the type of investments you can make. While a standard IRA limits your options to Wall Street assets, like stocks, bonds, mutual funds, and CDs, a Self-Directed IRA allows for alternative assets, such as industrial real estate.

A Self-Directed IRA investor sits back and enjoys the appreciation of their alternative assets over time.

Benefits of Investing in Industrial Real Estate with a Self-Directed IRA

There are a number of reasons you may want to leverage a Self-Directed IRA to invest in industrial real estate, including: 

Benefits of Investing in Industrial Real Estate Infographic: (1) Asset Diversification Opportunities - A Self-Directed IRA allows you to branch out beyond industrial real estate investments and diversify your retirement portfolio. (2) Potential for Higher Return on Investment - Compared to Wall Street products, like stocks, bonds, and mutual funds, industrial real estate can potentially offer higher returns. (3) Tax Advantages - If you invest in industrial real estate with a Self-Directed IRA, you can choose from tax-deferred (Self-Directed Traditional IRA) and tax-free growth (Self-Directed Roth IRA). (4) Passive Income -You can lease it out to tenants and collect rent, opening the doors to your IRA-owned industrial property. (5) Hedging Against Inflation - By investing in alternative assets, such as industrial real estate, you may be able to offset effects of inflation. (6) Property Appreciation - Fortunately, history shows that industrial real estate generally appreciates over time and has the potential to maximize your earnings.

How to Invest in Industrial Real Estate with Broad Financial

It’s a breeze to invest in industrial real estate with Broad Financial! Broad Financial offers the Self-Directed IRA with Checkbook Control, which enables you to invest alternative assets in real-time. Here’s what the process entails:

Icon investor typing on computer with a clock next to him opening and funding his Self Directed IRA account

You'll open a Self-Directed IRA with our sister company, Madison Trust by filling out their easy online application. Madison Trust will serve as your SDIRA custodian. 

Icon investor holding money and increasing graphs in the back showing that he opened and funded his IRA LLC checking account

Madison Trust will help you transfer or roll over all - or a portion - of your existing IRA, 401(k), or other retirement account into your new SDIRA. You can also make an initial contribution. 

Icon woman pointing at three check marks to show security and superior liability protection

Broad Financial will establish a new LLC or trust for your IRA and then you will open up a checking account at the bank of your choice. You'll then instruct Madison Trust to fund your new checking account. This will serve as your IRA’s self-directed investing platform.

Icon investor facing forwards pointing at an increasing trend graph to show how his investments have grown in his IRA LLC

Once the funds are in your newly established checking account, begin investing by simply writing a check or sending a wire.

Consider Diversifying Your Retirement Portfolio with Industrial Real Estate

If you’re interested in investing for retirement in industrial real estate, a Self-Directed IRA from Broad Financial is worth exploring. To get started or learn more, we encourage you to contact us today.


Disclaimer: Broad Financial LLC does not provide legal, tax, or investment advice. Please consult with your tax or legal advisor before making investment decisions. 

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