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The Industrial Warehouse Market is Booming. Is Your Community Ready?

The industrial warehouse market is booming. Stimulated by rising e-commerce demand, industrial/logistics was the most resilient real estate sector during the economic fallout caused by the COVID-19 pandemic and experts believe this demand is only expected to grow.

From tax revenue to job creation, this industrial warehouse boom is beneficial for Texas communities. But how can these communities position themselves as attractive locations for these developments? I sat down with Kyle Valentine from Stream Realty to find out.

Have a Proactive Plan

There are a lot of incentives cities and counties can use to attract warehouse developments, but with so many excellent locations across Texas to choose from, how can a city or county ensure they are an attractive prospective location for new warehouse developments? Prior to the shift in e-commerce demand, large-scale developers relied heavily on economic incentives in their decision-making process. According to Kyle, that’s no longer the case.

While financial incentives are attractive, Kyle says having a proactive plan addressing a developer’s biggest real estate development concerns may prove more beneficial.

“Rather than being reactive when a developer asks how your area can differentiate itself, cities and counties should have a clear path to seamless development,” Kyle said.

The current market has industrial warehouse developers looking to get their facilities on the ground as quickly as possible – requiring municipalities to have a plan that proactively addresses their development concerns. These concerns can vary depending on the potential location but commonly include site compatibility, access to major thoroughfare roadways and highways, utility access, floodplain impact, detention availability, and the length of time for permitting a development project.

 

Why This Matters for Texas Cities and Counties

The industrial warehouse sector is at times an overlooked segment in the commercial real estate market, but industrial warehouse developments can generate tremendous economic value for the cities and counties where they are located. Not only do these facilities create high-paying, skilled jobs for area residents, but they generate a tax base with an average valuation of more than $70 per square foot when fully leased, according to Kyle.

Cities and counties located in high-growth areas can improve their chances of attracting warehouse developments by preparing their local infrastructure to accommodate these future developments.  For those high-growth cities and counties that can prepare their infrastructure to attract industrial warehouse developments, the economic benefits to their communities can be significant.

Looking for more insights on Texas’s industrial real estate market? Check out episode 18 of our podcast, Texas By Design!  You can watch the episode on YouTube or listen wherever you get your podcasts. Be sure to subscribe for all the latest news and trends affecting Texas municipalities and the AEC industry.

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