Industrial Real Estate Is Due A Reshuffle – How Can Businesses Adapt?
By Jennifer Dawson
The real estate that underpins the manufacturing industry saw its biggest period of volatility, perhaps ever, during the pandemic. As Forbes notes, the market came roaring back with $809 billion in sales through 2021 and early 2022; however, now, market forces are threatening to restrain that growth. With that in mind, it’s a good time to think about moving in order to secure better priced real estate – whether to take advantage of cheaper rates, or to move away from property soon to explode in cost. Of course, there’s always difficulty associated with moving heavy industry. Minimizing issues starts with the realtor you work with.
Finding trusted partners
Moving an entire fleet of logistic equipment requires, in itself, logistical help. As McKinsey highlights, this is getting easier with the advent of electrified fleets – modular installation means that individual parts of the machine can be taken away, making the process of moving easier. However, with the majority of heavy equipment remaining on a gas footing, there are numerous considerations that become apparent during the process, including emissions limits, the cost of moving heavy machinery, and the bureaucracy surrounding all of that. When moving into a new site, it’s crucial that the site is fit for purpose and that a proper liaison is established to meet local ordinance regarding heavy machinery and emissions; a proper realtor with experience in the industry will help you to meet that requirement.
Making permanent roots
It is not cost effective to constantly move a heavy machinery equipped industry. While making a switch every few years to help obtain better ground rent costs is efficient, it does cost money and valuable time to move. As such, it’s important to also pick a new site in an area where manufacturing is there to stay. The modern heavy industry site is a little different to what it was in the past; it needs good connectivity in terms of power and internet, and often solid connections to the surrounding area. AdvisorSmith recommends Elkhart, IN, and Columbus, IN, as examples of where old meets new to create future-proofed manufacturing sites.
Local talent pools
In the logistics industry it’s also important to have a constant supply of well trained professionals. This is true whether operating the equipment at business level, or acting as a third party for the sale and rental of equipment. As such, investing in new property with an active local talent pool is essential. According to AreaDevelopment, the states with the deepest labor pockets are Texas, Louisiana and Indiana. With the focus on high quality estates also found across cities in Indiana, it seems like the Midwest state might be one of the best to set down new roots in.
Making a success out of a business relocation ultimately comes down to good advice. Doing research to establish the best places to do business, and then layering that up with local knowledge and expertise, will ensure any move is an efficient and smooth one.