INCUBATOR SEARCH CRITERIA - Maxfield Real Estate Group

Business and Industrial Incubators and Adaptive Reuse Projects

 General Selection and Search Criteria

Types of Structures

 Typically, good prospective incubator buildings will have been vacant or more than 50% vacant for 1 year or longer.

Older industrial buildings

  • Dark or semi-dark retail with adverse demographics
  • Some older or multi-story B or C office buildings

Seller/Owner Characteristics

Owner must be motivated at an 8-level or above

  • Owner must be entrepreneurially-minded
  • Owner must be flexible and open to creativity
  • Owner’s Loan to Value should be less than 25%
  • Or, if the building is vacant, the owner must be willing and able to carry the loan payment for up to a year.
  • Or Owner must be willing to finance the building or wrap the small existing loan
  • Or owner must be willing to enter into a long-term Master Lease with Option to Purchase (usually 5 years with one 5-year renewal option)
  • Owner will usually be open to participation in the operating entity as a silent partner.

Building Characteristics




12,000 to 50,000 s.f. is needed for the typical incubator operation;

Ideal situation is 100,000 s.f. or more with 2 or more traditional tenants in place and the rest open for new incubator space.

Older, Multi-story is okay

25,000 to 150,000 s.f. strip center;

Multi-story is okay

25,000 to 100,000 s.f.

Multi-story is okay

 Vacant Churches sometimes work

The typical incubator will house 15 to 35 new start-up businesses each occupying an average of 750 s.f. to 1500 s.f. for 1-3 years before they grow out of the space.  The listing broker or agent is sometimes offered an opportunity to participate in the operation or to help with sub-leasing.