As soon as executives become aware they need extra distribution and/or warehouse space, they should act on it. Even in this economy, you might not find a better deal by waiting a few months.

 “The smart users of today are taking advantage of this environment to consolidate their operations or to expand because there has been a fair amount of product that was built in the last couple of years,” says Steve Golding, president and COO, Jackson Shaw Co., a Dallas-based commercial real estate development group with 35 years experience in developing warehouse, office and hotel spaces.

“If a client has good credit they have a choice of product today,” says Bill Ginder, vice president of commercial client services for Caldwell Co.'s., located in Houston. The company is a full-service commercial real estate firm. “Clients can find the most efficient building for their operations. And they can negotiate a fair deal. They can also find rent concessions. As spaces are absorbed, those opportunities go away.”

Golding points out that when businesses wait too long, and once business turns around and there is a need for expansion and taking more space, the spaces are gobbled up quickly. “There is no new product coming on board behind it because nothing has been built,” Golding notes. He says that because banks and investors have been leery of starting spec construction, there will be a lag period before new space is built. The company is focused on developments in the Dallas, Washington, D.C.-Baltimore, Jacksonville and Las Vegas marketplaces.

Developers aren't the only ones advising companies to act now to secure spaces. Localities, economic development organizations and private industry have established or created programs and funds to support companies in meeting their distribution and warehouse goals. “More states, cities and economic developers are being more aggressive in regard to incentives and assistance in terms of relocating companies if they are willing to move,” Golding says.

In Victorville, Calif., waste water capabilities were important to Dr. Pepper-Snapple in siting its 850,000-square-foot manufacturing and distribution center. The company selected the Southern California Logistics Airport (SCLA), a 5,000-acre master planned industrial complex, for this facility. “The company was looking for us to be creative in helping them solve what could have been a problem, from a cost standpoint,” says Collette Hanna, business development manager, city of Victorville. “We built a waste water treatment facility to accommodate not only their needs but other food processing needs that would have a similar challenge.”

Victorville has also formed its own municipal utility, working with large power users to offset their electricity and gas costs. The city can also assist companies in meeting LEED certification. Hanna says most of the facilities at the SCLA are LEED registered or certified.

The SCLA is also a state-designated LAMBRA zone, which offers hiring credits and sales and use tax credits, similar to Enterprise Zones, Hanna notes. SCLA is also designated a Foreign Trade Zone, a U.S. Custom's Point of Entry, and is located in the middle of the largest redevelopment project area in the state of California.

Moving back to Houston, the Greenspoint District features a Freeport Tax Exemption designation, where if a manufactured product is shipped out of Texas within 180 days that percentage of inventory is not subject to ad valorem property tax. “It can be a large number if your company's product is oil rigs and you are shipping out of state,” Ginder says.

Multiple Modes In One Place

Regional partners are also working together to support the logistics needs of firms in their areas by creating intermodal opportunities. In the central Louisiana region, recent findings from a study for a proposed intermodal center indicate there are four potential sites in the area. One is the Alexandria Regional Port, which would have several modes of transportation, including water. The inland port moves nearly 500,000 tons of products a year.

Another potential site is the former England Air Force Base, now called the England Industrial Airpark. Officials have the funding to expand a 9,300-foot runway to 10,500 feet. There are 200,000 square feet of warehouse space in the works at the airport.

“With our industrial airport, which we have available for passenger services, potential air freight services, our proximity to two mainline railroads, interstate highways, and our port, our region is positioned to become an intermodal hub,” says Elton Pody, Central Louisiana Chamber of Commerce. The region is home to a large operation for Procter & Gamble, which has attracted a number of trucking companies to the area. The presence of Fort Polk in the region has created a lot of logistics-related activities. And, recently, Savage Transportation Co., located in the region to manage the logistics work for Central Louisiana Energy Corp.'s recently built $1 billion power plant, which burns petroleum coal and coke, shipped by the Red River.

Moving east to West Virginia, there are 422 miles of navigable waterways, the majority of which consists of the Ohio River. To support logistics efforts in the region, an inland intermodal complex is underway in Prichard. The project is more than just a transfer site for 20 foot and 40 foot containers from rail to truck, but also an economic development project where 60 counties and three states are working together.

The development sits on the Heartland Corridor, a project to improve the movement of goods from the ports of Virginia to Midwest markets. There are 29 tunnels along the corridor that need to be cleared to accommodate double-stack trains, 26 of which are located in West Virginia. “We put together a coalition from Virginia, West Virginia, and Ohio, to include Kentucky, to pull together freight funding out of the last Surface Transportation Bill,” says Patrick Donovan, executive director, West Virginia Public Port Authority. Ninety million dollars were awarded to support the tunnel clearance needs. Norfolk Southern Railway Co. added $49.5 million to clear obstacles as well.

For the intermodal complex in Prichard, Norfolk Southern gifted the West Virginia Public Port Authority with 78 acres of rail property to develop a rail terminal. Norfolk Southern also awarded the port authority with a $1 million grant to assist in the development of the site. An additional $3.5 million of private investment has also been invested.

Donovan says the complex sits on the Interstate 64 corridor, which has excess capacity, allowing for the identification of sites available for warehouse and distribution opportunities in the 500,000 square foot or larger range. Donovan says coalition partners are working to assemble property as close to the interstate system and as close to an exit as possible so trucks can get on the transportation network as soon as possible.

Moving west to the Port of Tacoma, Wash., goods move in and out of the port efficiently based on several infrastructure advantages, including the distance from city's downtown commercial core, which means a lack of congestion. The port's terminals are located less than two miles from Interstate 5. A number of overpasses allow rail and road traffic to move efficiently in and out of the terminal, says Bob Emerson, senior director of industrial real estate, Port of Tacoma. “This infrastructure bodes well for the efficiency for containerized cargo that we handle now and for the ability for us to grow the container volume in the future.”

In fact, Emerson says the Port of Tacoma is by no means as large as it can be, and that it can grow to at least double the size it is today, tempered by the current economic climate. And the nearby community embraces the growth. In a study conducted in Pierce County, 84 percent of the respondents said they would either support or strongly support the expansion of the port's business.

And companies will find an inventory of existing warehouse facilities, and both small and large tracts of land in proximity to the port that will meet their needs. In Frederickson, IKEA sited an 800,000-square-foot import distribution center, with the potential to grow to 1 million square feet, on a 65-acre site.

Changing Needs

In Irving, Texas, Jackson Shaw's Parc 114 offers immediate access to the transportation network, fronting Beltline Road off of Highway 114. The other three sides of the property are surrounded by the Dallas-Fort Worth International Airport. The site is planned for 600,000 square feet of available space. The buildings are designed for different users and in different sizes.

For the Creekside development, located at the Jacksonville (Fla.) International Airport, Jackson Shaw offers three buildings comprising nearly 330,000 square feet. In Beltsville, Md., the redevelopment of the “Brick Yard,” a former manufacturing site, features several facilities.

In Jackson Shaw's experiences with companies located in different marketplaces, common themes include getting operations under control and under one roof and reducing the number of personnel. “The location of the building is critical, which has always been an issue, but even more so,” he says. “Companies see opportunities to tie up property on long-term leases.”

“Tenants are looking to be more frugal in how they spend their dollars,” says David Simard, president, Storm Properties, Inc., based in Torrance, Calif. The company is an industrial developer focusing on warehouse and distribution space in the Inland Empire, South Bay, and the ports of Long Beach and Los Angeles in California.

Instead of leasing older buildings, 100,000 square feet, with 18-foot clear heights, they are interested in leasing 50,000 square feet with 34-foot clear heights, allowing more vertical racking and higher warehouse capabilities.

Simard's company manages 700,000 square feet of facilities, with 1 million square feet under construction, and with another 1.5 million square feet in various stages and entitlements.

Simard says companies looking for distribution and/or warehouse space should consider that during good times, where there is a lot of lending in the real estate market, smaller companies are able to move in and seize opportunities. “Now is the opportunity for an individual or company that is looking for additional space, if they have the resources, there will be less competition that allows them to perhaps negotiate a better deal,” Simard says.

For complete details about the organizations listed in this article, visit:

Caldwell Co.'s., www.caldwellcos.com

Central Louisiana Chamber of Commerce, www.cenlachamber.org

City of Victorville (Calif.), www.victorvillecity.com

Jackson Shaw Co., www.jacksonshaw.com

Port of Tacoma (Wash.), www.portoftacoma.com

Storm Properties, Inc., www.storm-properties.com

West Virginia Public Port Authority, www.wvdot.com

Greensboro Is A Smart Choice For Logistics

When you are a region that is the advanced manufacturing center in the state of North Carolina, logistics goes hand-in-hand with the cluster. The greater Greensboro area, consisting of 12 counties, and a population of 1.2-million-people, features the larger communities of Greensboro, Winston-Salem and High Point.

Even though manufacturing makes up less of a percentage of the total it once was, the movement of goods for advanced manufacturing and aerospace firms in the area are still thriving. A well-educated and young labor force is an important logistics-related resource found in the region, says Dan Lynch, president, Greensboro Economic Development Alliance. The region is home to 11 colleges and universities. The University of North Carolina at Greensboro and North Carolina A&T State University offer logistics management and engineering programs to support the industry. A local community college features a logistics institute for logistics-related companies to tap into.

The training opportunities, and a labor force of 830,000 people in the 12 counties, as well as numerous transportation infrastructure advantages, have been attractive to firms such as one of only five in the country FedEx express hubs, which will move workers into the $300 million facility this summer. FedEx also has a $100 million, 500,000-square-foot ground facility under construction. UPS also has a large ground hub located in the area, employing 2,000 people.

Two years ago, Honda announced it would site its first jet aircraft manufacturing and R&D facility at the Piedmont Triad International Airport. Its headquarters and design center and R&D center are open; this spring the company expected to begin building its manufacturing building. The company will be able to take advantage of its location next to the FedEx express hub to bring in parts, Lynch says.

To learn the complete details of the logistics-related opportunities in Greensboro, visit www.greensboroeda.com.

Warehouse/Distribution

Based on number of establishments, first quarter 2007 to first quarter 2008.

Startups         

1. Texas (Tie)  

1. California (Tie)        

3. Florida        

4. Georgia       

5. North Carolina        

6. New York   

7. Ohio

8. Michigan     

8. Illinois          

10. New Jersey           

New Branches           

1. Texas          

2. California     

3. Florida        

4. Illinois          

5. New York   

6. Pennsylvania

7. New Jersey 

8. Ohio

9. Georgia       

10. Michigan   

Employment  

1. California     

2. Texas          

3. Ohio

4. Pennsylvania

5. Illinois          

6. Florida        

7. Georgia       

8. New Jersey 

9. New York   

10. Michigan   

Data includes the following classifications:

55-221 Farm product warehousing and storage            

55-222 Refrigerated warehousing and storage              

55-225 General warehousing and storage                     

55-226 Specialized warehousing and storage                

55-231 Trucking terminal facilities        

Source: Since 1990, BizMiner has built its reputation on quality research in the fields of economic and business development. The company tracks more than 12 million U.S. businesses annually, developing vitality benchmarks and reports on more than 17,000 lines of business in every U.S. county, MSA and state. Measures include sales, business retention, entrepreneurial activity, new branch attraction, business relocation trends and concentrations of high-growth firms.

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