Small Bay Industrial
Flex & light industrial financing
Bridge loans for small bay industrial, flex space, and light manufacturing properties. Acquisition, conversion, and lease-up capital for the strongest asset class in commercial real estate.
Why Small Bay Industrial
The strongest fundamentals in commercial real estate
Small bay industrial has the lowest vacancy rates, strongest rent growth, and most favorable supply-demand dynamics of any commercial asset class. E-commerce, last-mile logistics, and small business growth are driving demand that new construction cannot satisfy.
The Strongest CRE Fundamentals
Small bay industrial has the lowest vacancy rate and strongest rent growth of any commercial asset class. E-commerce, last-mile logistics, and the growth of small business operations are driving demand that new construction cannot keep pace with.
Underserved by Traditional Lenders
Banks prefer large single-tenant industrial with credit tenants. Multi-tenant small bay buildings with diverse tenant bases and frequent turnover do not fit conventional underwriting. Bridge financing fills this gap for experienced operators.
Speed Wins in a Tight Market
Institutional capital has discovered small bay industrial, compressing cap rates and accelerating deal timelines. A 10-day close with no financing contingency differentiates your offer in a market where multiple bidders are common.
Use Cases
What we finance
From multi-tenant flex acquisitions to office-to-industrial conversions and bay subdivision projects.
Multi-Tenant Flex Acquisitions
Acquire small bay industrial buildings with 4-20 suites in the 1,000-5,000 SF range. These multi-tenant properties generate diversified income from small businesses, contractors, e-commerce operators, and service companies. Bridge financing underwrites to the stabilized rent roll, not just current occupancy.
Office-to-Industrial Conversion
Convert obsolete suburban office buildings into flex industrial space. Office vacancy is elevated nationally while small bay industrial demand is at historic highs. Bridge capital funds the acquisition and conversion, with improvement holdbacks releasing as tenant improvements are completed.
Building Upgrades & Modernization
Fund electrical upgrades (3-phase power), loading dock additions, HVAC improvements, LED lighting, and roll-up door installations that transform dated buildings into modern flex space commanding premium rents. Each improvement directly increases per-square-foot rental rates.
Lease-Up Capital
Finance vacant or underoccupied industrial buildings during the tenant improvement and leasing period. Bridge loans provide 12-18 months of runway to build out suites, market the space, and sign tenants without the pressure of conventional debt service coverage requirements.
Subdivision & Bay Creation
Acquire single-tenant industrial buildings and subdivide into multi-tenant small bays. A 30,000 SF warehouse leased to one tenant at $6/SF can generate $10-$14/SF when subdivided into 2,000-5,000 SF bays. Bridge financing covers the acquisition and build-out.
Portfolio Consolidation
Combine multiple small bay industrial acquisitions into a single bridge facility. Operators building a portfolio of flex and light industrial properties can streamline closings and reduce transaction costs across multiple simultaneous acquisitions.
Deal Economics
How the numbers work
A representative small bay industrial acquisition: buy a half-vacant building, subdivide, lease up, and refinance at a significantly higher valuation.
Acquisition
Bridge Loan
Stabilized (12 Months)
Representative example for illustrative purposes only. Actual deal economics vary based on market conditions, execution, and property specifics.
FAQ
Small bay industrial lending FAQ
Small bay industrial refers to multi-tenant industrial buildings where individual suites typically range from 1,000 to 5,000 square feet. These properties serve small businesses, contractors, e-commerce fulfillment operations, light manufacturers, and service companies. Total building sizes typically range from 10,000 to 100,000 square feet with 4-20+ individual tenant suites.
Yes. Small bay industrial and flex space are active lending categories. We finance acquisitions, lease-up, building modernization, office-to-industrial conversions, and subdivision of larger buildings into multi-tenant small bays. Loan sizes range from $250K to $10M.
Yes. Office-to-industrial conversion is one of the strongest value-add plays in commercial real estate. We structure bridge loans with improvement holdbacks to cover both the acquisition and conversion costs. Funds release as construction milestones are completed.
We evaluate the property based on market rents for comparable flex and small bay space, the borrower's leasing plan, tenant improvement budgets, and the exit strategy. A multi-tenant industrial building at 50-60% occupancy with below-market rents and strong local demand is a deal we want to evaluate.
Most common exits include refinancing into conventional bank financing or SBA 504 loans once the property reaches 85%+ occupancy with 6-12 months of trailing income history. Some borrowers also exit through sale of the stabilized asset at significantly compressed cap rates.
Yes. We structure tenant improvement holdbacks directly into the bridge loan. This covers suite build-outs, demising walls, electrical upgrades, HVAC, loading areas, and other improvements needed to lease individual bays. Draws release as TI work is completed.
We can close in as few as 10 business days from signed term sheet. Most industrial deals close within 10-15 business days. Term sheets are delivered within 48 hours of receiving a complete deal package.
Requity Lending provides small bay industrial financing nationwide. We evaluate markets based on industrial vacancy rates, e-commerce penetration, population and employment growth, and comparable rental rates for flex and small bay space.