By James A. Schnur, CCIM
President and Designated Managing Broker
Integrated Real Estate Solutions
LinkedIn
Strategy in the business world involves careful planning that aligns decisions with an organization’s mission and goals. Organizations benefit from strategic site selection, finding the perfect industrial location for their businesses. However, making the final decision on a site demands consideration of key selection criteria and the utilization of helpful tools and techniques. Let’s consider the importance of making a strategic site selection, the key criteria for such a decision, and the tools and techniques beneficial to the process.
Business Benefits
Strategically selecting a site for your industrial location provides several benefits:
- Proximity to Suppliers and Customers: Locate an industrial site close to suppliers to reduce transportation time and, thereby, lower costs. Proximity to suppliers can also ensure you enjoy a steady flow of raw materials. Being near your customers can enable you to deliver products faster and provide timely customer service.
- Availability of Skilled Labor: Locating a site in a region popular for specific skills can make recruiting for skilled labor easier and less costly. Improved productivity, reduced recruitment and training costs, and enhanced operational efficiency are some of the benefits of having a strong workforce near the industrial site.
- Access to Transportation Networks and Utilities: Does the site under consideration have access to robust infrastructure – roads, railways, ports, trucking terminals? How reliable are the utilities in the area? Locating near an infrastructure offering multiple transport features as well as reliable utilities can reduce transportation time and minimize production downtime.
Key Criteria
Key criteria for strategic site selection for an industrial site include the following:
- Logistics: Because a robust infrastructure is so beneficial to your business, strategic site selection must consider logistics and infrastructure in the decision. In addition to the importance of locating near transport hubs and robust utilities, as mentioned above, the infrastructure surrounding the site should provide smooth connectivity to your key markets.
- Regulatory Compliance: Failing to comply with regulations governing a site can lead to more than frustration; noncompliance can carry exorbitant fines and fees. Before choosing a site, you must ensure the location and your plans for use of the site meet legal and environmental regulations.
- Costs: A key consideration includes balancing upfront costs and potential long-term savings. Does the location offer tax incentives? Are the prices for land in the area increasing or do prices reflect the top of the market for the location? Investing more in a beneficial location may provide savings in operational costs in the future.
Tools and Techniques
Fortunately, you can utilize some helpful tools and techniques when assessing potential sites.
- Geographic Information Systems (GIS): National Geographic’s Open Educational Resource describes GIS as “a computer system for capturing, storing, checking, and displaying data related to positions on earth’s surface.” GIS systems report both spatial features of a location and attribute data. For example, vector data may illustrate a city as a point on a map and the associated attribute data may provide population or economic statistics of that geographic feature. Using the appropriate GIS for your needs can offer data critical to analyzing a potential site.
- Visits and consultations: Strategic site selection must always include a visit to the site location. You should also schedule consultations with local authorities who can answer questions about regulations as well as offer additional information regarding infrastructure. Holding consultations with stakeholders enables you to consider their concerns in your decision.
- Pros and cons: After collecting data on the key criteria, analyzing the information provided by a GIS, visiting the site, and consulting with authorities and stakeholders, you need to weigh the pros and cons of each potential site. Does this location allow you to operate in a manner consistent with your organization’s mission? Would operating at this site meet your business goals?
When considering a new industrial site, look to the professionals at Integrated Real Estate Solutions, Inc. They offer commercial real estate brokerage and consulting services that make in-depth market research, surveys, requirements analysis, and other financial capabilities available, guaranteeing you have the information you need to make a strategic site selection decision. And they can help you assess the pros and cons when making your decision.
Integrated Real Estate Solutions, Inc. provides clients with the in-depth knowledge and experience that is critical to determine the right path to your next move, lease renewal, or strategic repositioning of your real estate portfolio. Contact us or call 847.550.0160 today about your needs and put our success to work for you.