Industrial real estate vacancy ratings in Northeast Ohio are extremely low. Such a “tight” market means buyers and potential tenants either need to get creative or get help.
“Competition for industrial property is incredibly high,” says Ryan Curtin an Associate at Cushman & Wakefield | CRESCO Real Estate. “There are spaces available, but many require additional investment to make them work. And when it comes to land zoned for industrial that’s suitable for new construction, we’re seeing a drastic increase in pricing. It’s common for land to go for more than 20-30 percent over previous per acre pricing”
Smart Business spoke with Curtin about the challenges and opportunities in the Northeast Ohio industrial market, and how to navigate them.
What opportunities exist for industrial businesses growing in Northeast Ohio?
Industrial businesses should consider meeting with city and county officials to discuss real estate tax incentives, and the regional economic development partner, Team NEO, to explore what state incentives can help close gaps in financing to make projects go. Tax incentives, especially around new construction, are great tools to encourage further development within industrial real estate. The sector is looking for additional tax abatements for new developments and property taxes to offset rising costs and transform otherwise challenging properties into productive sites.
Businesses should also discuss with local and regional economic development partners what potential programs can support infrastructure, like the ODOT Jobs & Commerce Economic Development Program. Opportunity Corridor is a good example of an area that had multiple funders assist with the infrastructure, and now the available sites will need additional real estate tax incentives to cover the financing gaps to deliver new construction projects.
Companies in the industrial sector would also benefit from an increase in the pool of available skilled labor. That can be done through additional investments in education as well as research and development.
In Cleveland and its first-ring suburbs, there is a readily available labor force with a range of skills and abilities to suit industrial, manufacturing, warehousing, storage and transportation. In places like Brecksville, the labor market is strong in management, professional services and R&D, which explains why Sherwin Williams is building its R&D HQ at Valor Acres. That market also needed more housing and multifamily development, which is expected to show up at that site as well.
Businesses that can be a little more patient could utilize brownfield programs at sites that need cleanup and assessments. While there are remediation efforts — funding through the Ohio Brownfield Remediation Program and reclamation efforts through the Cuyahoga Land Reutilization Corp. — potential buyers with more of an immediate need tend to pass on remediation and are instead looking outside of those sites into second- and third-ring, suburbs that tend to have more ‘ready to go’ sites.
How competitive is Northeast Ohio in attracting industrial businesses?
Northeast Ohio is highly competitive in attracting industrial businesses. The name of the game is finding available and ready sites, aligned with an area that can attract the right talent, and in a place that has ample utility infrastructure. For example, power is an extremely important utility now as there’s a lot of data center development going on across the country. Northeast Ohio, relative to the rest of Ohio, is in a strong position as it relates to available power.
Northeast Ohio’s superior interstate and highway infrastructure helps companies access key suppliers and customers throughout Ohio and in neighboring states. Showing a client the combination of interstate access with key suppliers and key customers along with drive time analysis helps companies visualize the advantages of locating in Northeast Ohio.
There are many challenges to navigate when trying to find suitable industrial land in a tight Northeast Ohio market. That’s why working with the right local broker is the best first step. They have a deep understanding of the economic development ecosystem and are not only plugged into the market, but they can help navigate the negotiation processes and identify resources that can help offset the costs of what can be an expensive acquisition. ●
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