Evaluating Industrial Property Locations for Your Business
Choosing the right location for your industrial property is crucial for operational efficiency, cost management, and long-term business success. The location impacts everything from supply chain logistics and employee accessibility to regulatory compliance and local market conditions. A well-positioned industrial property can streamline distribution, reduce transportation costs, and attract a skilled workforce, ultimately enhancing your company’s growth potential.
This guide provides a detailed approach to evaluating industrial property locations, ensuring that your decision supports both current operations and future scalability.
Key Criteria for Evaluating Industrial Property Locations
1. Proximity to Suppliers and Customers
A strategic location can enhance supply chain efficiency, reduce lead times, and lower transportation costs.
Supply Chain Efficiency:
Supplier Proximity: Reducing the distance between your facility and key suppliers minimizes shipping costs and delivery delays.
Distribution Networks: Choose a location that optimizes distribution routes and integrates seamlessly with your logistics network.
Customer Access:
Market Reach: Ensure your facility is close to key customer bases, reducing delivery times and improving service levels.
Service Area Coverage: If your business involves regular client visits, consider accessibility and convenience for customers.
2. Transportation and Accessibility
Efficient transportation links and workforce accessibility are critical for industrial businesses.
Major Transport Links:
Highways & Roads: Proximity to major interstates allows for seamless movement of goods and supplies.
Rail, Ports & Airports: Consider locations near key transport hubs if your business involves large-scale shipping or imports/exports.
Employee Commute:
Public Transit Access: Ensure public transportation is available for employees who rely on buses or trains.
On-Site Parking: Secure ample parking space for employees, customers, and truck drivers making frequent stops.
3. Zoning and Regulatory Compliance
Local zoning laws and regulations dictate what types of business activities can be conducted in an area.
Zoning Laws:
Industrial Zoning Classification: Confirm that the property is designated for light, medium, or heavy industrial use based on your operations.
Future Development Considerations: Investigate upcoming zoning changes that could affect property usage or resale value.
Regulatory Compliance:
Environmental Regulations: Ensure compliance with emissions standards, waste disposal laws, and hazardous material handling requirements.
Health & Safety Codes: Review workplace safety regulations, including fire codes, ventilation standards, and structural integrity requirements.
4. Local Infrastructure and Amenities
A well-equipped industrial facility requires reliable infrastructure and access to essential services.
Utilities and Services:
Power Supply: Industrial operations often require high voltage capacity—confirm that the facility can handle your electricity demands.
Water & Waste Management: Verify the availability of sufficient water supply and compliance with local waste disposal requirements.
Technology & Connectivity:
High-Speed Internet & Telecommunications: Businesses increasingly depend on fast, reliable connectivity—ensure fiber-optic or broadband internet is available.
Security Infrastructure: Look for properties with surveillance cameras, gated entry, and on-site security measures.
Local Amenities:
Employee Convenience: Proximity to restaurants, banks, medical facilities, and fitness centers improves workforce satisfaction.
Business Support Services: Nearby maintenance providers, industrial suppliers, and logistics partners contribute to operational efficiency.
5. Workforce Availability
A location with a strong labor pool ensures you have access to skilled employees at competitive wage rates.
Labor Market Factors:
Skilled Workforce: Assess the availability of employees with the technical skills required for manufacturing, warehousing, or logistics.
Labor Costs: Compare local wages and employment rates to determine the affordability of hiring in different regions.
Training & Development Opportunities:
Proximity to Educational Institutions: Locations near technical colleges or trade schools provide access to trained graduates and apprenticeship programs.
Workforce Retention Factors: Consider job market conditions, wage expectations, and competition for skilled workers.
6. Environmental and Community Factors
The surrounding environment and local community impact business sustainability, regulatory compliance, and reputation.
Environmental Impact:
Sustainability Practices: Choose a location that supports energy-efficient operations and eco-friendly initiatives.
Natural Disaster Risk: Assess flood zones, earthquake-prone regions, and storm exposure to mitigate risks.
Community Relations & Local Economy:
Community Support: Establishing a positive relationship with local residents can help ease permitting processes and reduce opposition.
Economic Conditions: Thriving local economies create opportunities for collaboration, workforce stability, and business growth.
7. Financial Considerations
A financially viable location ensures long-term affordability and return on investment.
Real Estate Costs:
Purchase vs. Lease: Weigh the benefits of buying a property for equity growth versus leasing for flexibility.
Property Taxes: Research local tax rates to avoid unexpected expenses in high-tax jurisdictions.
Incentives & Grants:
Government Incentives: Investigate state and federal tax breaks, economic development grants, and job creation incentives.
Opportunity Zones: Some locations offer favorable tax treatments for industrial development, reducing overall business costs.
Operating Expenses:
Utilities & Maintenance: Include energy costs, upkeep, and building insurance in your financial planning.
Transportation & Logistics Costs: Account for fuel expenses, freight charges, and potential toll road fees.
Steps to Evaluate Industrial Property Locations
1. Conduct Market Research
Use Commercial Real Estate Platforms: Browse properties on LoopNet, CoStar, and Crexi for market insights.
Inspect the Property: Assess building condition, infrastructure, and potential renovation costs.
Explore the Local Area: Visit nearby businesses, roads, and amenities to gauge overall convenience and accessibility.
3. Consult with Professionals
Hire a Commercial Real Estate Broker: Brokers can provide off-market opportunities and industry expertise.
Engage Legal & Zoning Experts: Ensure that the location meets all local, state, and federal compliance standards.
4. Compare & Analyze Your Options
Create a Comparison Matrix: Rank locations based on key factors like cost, workforce availability, and infrastructure.
Conduct a Financial Feasibility Study: Review total expenses, tax liabilities, and long-term investment potential.
Conclusion: Selecting the Best Location for Your Industrial Property
Evaluating industrial property locations requires a comprehensive assessment of supply chain logistics, accessibility, workforce availability, financial viability, and regulatory compliance. A well-researched location enhances operational efficiency, reduces costs, and creates a solid foundation for business growth.
By conducting thorough market research, visiting potential sites, consulting industry professionals, and comparing multiple options, you can make an informed decision that aligns with your long-term business objectives.
Gordon is a licensed Illinois & Wisconsin Real Estate Broker, who manages the commercial sales and leasing team. Gordon also leads Van Vlissingen and Co’s media marketing team. He is an honors graduate of St. Mary’s College of Maryland and holds a Juris Doctorate from Tulane University Law School.