The BIG FIVE: My Must-Have Locational Needs
By John Salustri
Location, location, location. The old saying holds true as much for the industrial market as it does when people are shopping for a new home–especially in an environment where manufacturing and warehouse space is so hard to come by.
Understandably then, the well-worn “Location, location, location” is the Number One must-have for IAMC member Kapil Kohli, Air Liquide’s Houston-based Industrial real estate manager for North America. “It’s big,” he says simply, “and this is where economic development corporations play a substantial role.” EDCs are Kohli’s first stop in a site search, specifically to define immediate and downstream tax and other incentives “to bring our business into that location.” Those conversations are also critical to determining the availability of resources, such as gas and electric service.
Second, but linked to Kohli’s Number one must-have, is the availability of renewable energy. What is the municipality’s stance on sustainability and what local, state and federal incentives will the firm have access to? “Do these justify an industry presence there?” he asks.
Third is the flexibility of the municipality. “There were locations that had tight restrictions on what a business could do,” says Kohli. He points out that “These restrictions can significantly delay projects.”
Market dynamics are Number Four on Kohli’s list. “What’s the rent progression?” In other words, how flexible and competitive can the landlord be in order to attract and retain tenants?
Number five is the local recognition that industrial is a progressive industry. Kohli says he wants to feel the love, meaning that he needs a location that understands that industrial today is more about robotics and energy conservation than older images of smokestacks and grime. He had witnessed projects where “the community voted against the investment.” The “no” vote was due in large part to misconceptions of what industrial means today. For that reason, there must be an alignment of wants and needs.