Industrial has a reputation as the easy asset class to underwrite: triple net leases, a handful of tenants, expenses mostly the tenants' problem. The reputation is half true, and the false half is expensive. Multi-tenant flex and warehouse deals concentrate risk in ways the clean NNN surface hides, and the underwriting has to go where the risk actually lives.
Start with concentration itself. A sixty-tenant strip center loses one tenant and loses a couple points of income. An eight-bay flex park loses one tenant and loses twelve percent of the rent roll in a single event, along with that bay's share of recoveries. Tenant-level thinking is not a refinement in industrial; it is the whole game, because the building only has eight decisions in it and each one is large.
That is why weighted average lease term is the headline durability metric in this asset class, and why it should be rent-weighted, the way institutions compute it, rather than a simple average of years. A park where the largest tenant by rent rolls in eighteen months has a very different risk profile from one where the smallest does, and simple averaging cannot tell them apart. WALT converts the rent roll into a single honest statement about how long the income is contracted to exist.
Rollover itself deserves more respect than industrial usually gives it. NNN structure protects the expense side, not the income side: a dark bay stops paying rent and stops covering its recoveries, and re-tenanting brings downtime, tenant improvements, and commissions like anywhere else, scaled to the space. Bay-by-bay rollover assumptions, renewal probability, downtime, TI, and leasing commissions per tenant, are what let a model price an expiration schedule instead of waving at it.
Then there is the part of industrial value that never appears on a rent roll: the site. Clear height, dock-high and drive-in doors, power, and office finish percentage drive what the next tenant pays. Site coverage decides whether the land under the building is a constraint or an option. A low-coverage site can carry outside storage income, expansion, or a future second building, and a model with no place to hold those physical facts is underwriting a spreadsheet, not a property.
The software screen for industrial, then: bay-level rent roll with per-tenant rollover economics, rent-weighted WALT computed live, the site and physical profile carried with the deal, and price-per-square-foot lenses alongside the income math, because industrial trades on both. PropCalc™ was built to that screen, and there is a live multi-bay flex deal on this site, fictional numbers, fully inspectable, linked below. Open it, roll a bay, and watch what honest concentration risk looks like in a model.