Small bay industrial refers to multi-tenant industrial buildings subdivided into individual units typically ranging from 1,000 to 5,000 square feet. Each unit includes at least one grade-level overhead door, 12–18 feet of clear height, and basic utilities (electrical, gas, bathroom). Unlike large distribution warehouses, small bay industrial is designed for local trade businesses, contractors, light manufacturers, and small-scale e-commerce operators.
The "bay" is the fundamental unit of the building, a self-contained leasable module with independent overhead door access. A 30,000-square-foot small bay building might contain 15–25 individual bays, each rented to a different business. Read the full article →
Warehouse space, also called "big-bay" or "bulk" industrial, is designed for large-scale distribution or manufacturing: typically 100,000+ square feet, dock-high loading, 28–40 foot clear heights, and one or two tenants on long-term leases. Small bay serves a completely different market: small businesses needing 1,000–5,000 square feet with grade-level overhead door access.
The tenant base, financing, management, and investment dynamics are fundamentally different. Big-bay is bought and sold by institutional investors at tight cap rates; small bay is managed by local and regional operators and offers higher yields in exchange for more management intensity. See the full comparison →
The best small bay markets combine a dense base of trade businesses (contractors, service companies, light manufacturers), limited quality existing supply, and land costs low enough to allow new development to pencil at market rents. Secondary Midwest markets, regional metros of 100,000–500,000 population like Lansing, Kalamazoo, Fort Wayne, and Toledo, often have strong underlying demand with very little institutional competition and minimal new supply.
These markets are Dymaxion's primary focus. The combination of structural demand from local businesses, aging existing stock, and limited institutional developer interest creates durable opportunity. Read more about market selection →
The core small bay tenant base includes: contractors and trade businesses (plumbers, electricians, HVAC technicians, landscapers, general contractors), light manufacturers and fabricators (sign shops, woodworkers, metal fabricators, cabinet makers), e-commerce and last-mile fulfillment operators, auto-related businesses (detailers, mechanics, restoration shops), food producers, and creative or maker businesses.
These tenants share a common need: functional, affordable workspace with grade-level overhead door access near their customer base. They are overwhelmingly owner-operated small businesses, not corporate tenants. Read the full tenant breakdown →
Most small bay industrial leases are structured as NNN (triple net), meaning the tenant pays base rent plus their pro-rata share of real estate taxes, building insurance, and common area maintenance (CAM). Initial lease terms typically run 1–3 years with renewal options. Established tenants with strong operating history may sign 3–5 year terms.
Personal guarantees from business principals are standard. Annual rent escalations of 2–3% are common. Month-to-month tenancies should be minimized, they create planning uncertainty and often signal tenant instability. Read more about lease rates and structures →
A standard small bay industrial unit includes: one or more grade-level overhead doors (typically 10x10 or 12x14 feet), a concrete slab floor, 12–16 feet of clear height, basic electrical service (100–200 amp), a bathroom, natural gas connection, and access to a common parking and maneuvering area.
Units in newer buildings may include floor drains, utility sinks, higher electrical service (200-amp three-phase), and LED lighting. Tenant improvements beyond the base shell, office buildout, additional plumbing, upgraded power, are typically negotiated based on lease term and tenant quality. Learn more about physical characteristics →
Hard construction costs for a small bay industrial complex typically range from $80 to $140 per square foot, depending on market, building specification, and site conditions. This range covers the building shell, grade-level doors, basic utilities, and site work. Land, soft costs (architecture, engineering, permits, typically 10–15% of hard costs), contingency (10–15%), and financing carry costs add to the total.
All-in development cost on a ground-up small bay project varies significantly by project and market conditions. Conservative underwriting with project-specific contractor pricing is essential before committing to a site. Read the full development cost breakdown →
A typical ground-up small bay development takes 12–24 months from site control to delivery, depending on entitlement complexity and permitting speed. Sites with existing industrial zoning can move faster than those requiring a rezoning. Construction itself typically takes 6–9 months for a standard complex. Lease-up after delivery can take an additional 2–6 months to reach stabilization.
Timeline is one of the most underappreciated cost drivers in development. Every month of pre-construction activity carries holding costs, and every month of construction carries loan interest. Experienced developers with established lender and contractor relationships can meaningfully reduce timeline. Read more about timeline and costs →
Small bay industrial development typically requires light industrial zoning, commonly designated as I-1, M-1, or similar in most Michigan and Midwest municipalities. This permits small-scale manufacturing, storage, contractor operations, and light fabrication. General industrial (I-2, M-2) is also permissible but may allow heavier uses.
Sites with existing industrial zoning are significantly faster and less risky to develop. Rezonings require public hearings, planning commission approval, and sometimes city council action, adding months and uncertainty to the timeline. Read the full zoning article →
Returns on small bay industrial investment depend on deal structure, market, and specific project performance. Ground-up development in secondary markets can generate development yields on cost (project NOI divided by total development cost) of 7–9% or higher in well-selected markets, with potential for additional value creation. Stabilized acquisitions trade at cap rates reflecting occupancy and market conditions.
Dymaxion structures deals on a project-by-project basis with preferred return structures. Returns are not guaranteed and past performance does not guarantee future results. Consult your financial advisor before making any investment decision. Read more about investing with Dymaxion →
Dymaxion works with accredited investors on a deal-by-deal co-invest basis. Each project is capitalized independently, investors review a specific project summary before deciding whether to participate. There is no blind pool or pre-committed capital; you evaluate each opportunity on its own merits.
To get started, use the intake form at the bottom of this page or on our investing page. Tell us about your investment interest, check size, timeline, markets, and we'll start a conversation. Qualified investors receive offering materials privately when an opportunity matches their profile.
Deal-by-deal investing means each opportunity is presented and capitalized independently, rather than pooled into a blind fund where investors commit capital without knowing where it will be deployed. Investors receive a full project package for each opportunity, specific site, market analysis, development budget, pro forma, and decide independently whether to participate.
This structure provides full transparency: you know exactly what you own, where it is, and how it's performing. Dymaxion uses a deal-by-deal structure for all investor co-invest opportunities because we believe transparency and deal-specific underwriting make better outcomes for everyone involved. Learn more about how Dymaxion structures deals →
Industrial-zoned land owners have three primary options: sell outright for immediate liquidity and certainty, develop the property themselves (requires development expertise and construction financing), or partner with an experienced developer like Dymaxion to share in the development upside without taking on the full burden of execution.
The right answer depends on your goals, timeline, tax situation, and risk appetite. An outright sale maximizes certainty; self-development maximizes control and potential return but requires expertise most landowners don't have; a partnership is a middle path that captures upside with managed risk. Read the full landowner options article →
Dymaxion looks for sites that are: located in secondary Midwest markets with strong small bay demand; zoned light industrial (I-1, M-1, or equivalent) without requiring a major rezoning; large enough to support a meaningful number of units (typically 2+ acres); accessible from a public road with adequate truck maneuvering; and free from significant environmental or title complications.
The ideal site has existing industrial zoning, good road frontage or visibility, and is near established neighborhoods where the trade tenant base operates. If you own land that may fit, reach out, we'll tell you honestly what we see. Learn more about land partnerships →
In a Dymaxion land partnership, the landowner contributes their parcel's appraised value as equity into the development entity. Dymaxion contributes development expertise, project management, investor capital raise, and post-delivery property management. Returns flow to all equity partners, including the landowner, according to a negotiated waterfall that includes a preferred return before developer profit participation.
The landowner avoids the management burden of development while participating in the upside of their land's development potential. Deal structures vary based on site value, project scope, and individual landowner goals. Read the full landowner options article →