What are the cost of running an industrial warehouse?

One of my rich acquaintance is looking to invest in industrial warehouse, the seller claims to make 8 CAP. but that doesn’t seem right to me, because all larger multiplex properties in the city is only aiming for 4-6% cap, so why should the warehouse have higher return?

What are the cost associated with running a warehouse? I would think the 50/50 rule won’t apply.

The utilities are covered by tenants, so the cost are Taxes, Insurance, Repair reserve, snow removal, (garbage is covered in tax) smaller management cost. It does seem to cut out a lot of expenses an apartment building would have, such as appliances reserve, cleaning cost.

You might consider the costs at 100% in that it is not likely in this current market that you will find a tenant. Personally, I like going after commercial projects that already have a proven cash flow/income, such as mobile home parks and apartment buildings. Even with a small project of 8 or 10 units, if you have a vacancy or two, it will not destroy the deal and you are less likely to lose your savings or contingency funds.

Hope this helps.