While development in large primary markets remains important, the growing need for developing warehouses and distribution centers in secondary and smaller regional markets could be a significant opportunity in 2016. We have found it is worth taking that connecting flight and driving a few extra hours to look at potential land sites; there’s no question that tenants exist with build-to-suit needs in these markets, and there is available land to meet those needs.
More than ever, tenants have warehousing and distribution requirements in smaller regional markets, including:
- A finished goods warehouse to accompany existing manufacturing in a smaller regional location
- Multiple in-market warehouses to span across numerous mid-sized and large cities
- Prime distribution needs located outside of the major markets for regional or local companies
- E-commerce last-mile distribution facilities across the country
Specific risks and considerations we consider when evaluating a build-to-suit project for a secondary market, include:
- Lease term and tenant credit characteristics
- Role of facility in the operations of the tenant
- Potential alternate uses at lease end, particularly for tenant-use specific buildings
- Local availability of quality general contractors with the capabilities and experience needed for the project
With experience in large, secondary and smaller regional markets and quality local contractors in any market in North America, BlueScope Properties Group offers unique insights in this type of development. Our ability to fund without any external financing partners and make all decisions in-house can provide you a quick answer on your project — and the certainty of a seamless experience.