Industrial & Manufacturing Site Selection: How to Choose the Right Location

The Takeaway: The industrial site selection process, when conducted by an experienced industrial commercial real estate firm, will help position your business for optimal success.

Commercial real estate site selection is a multi-step process best executed by an experienced professional. It requires careful analysis of many interrelated economic, environmental, political, logistical and labor factors and ultimately provides you with a holistic, actionable understanding of your top candidate sites’ strengths and weaknesses. 

This blog will help you understand what specifically gets analyzed during industrial site selection. It will also outline how the site analysis process helps industrial businesses achieve long-term success and profitability.

Economic Factors in Industrial Site Selection

Analyzing the economic factors at play during industrial site selection helps you make a more accurate cost comparison between different properties and locations. These factors include: 

• Economic Incentives

• What are the municipal, state, and federal economic incentives available for this location? 

• If the site will be leased, what lease incentives are available from the landlord, if any? 

• Access to Raw Materials

• How close are the necessary raw materials to this site?

• What are the costs of transporting the necessary raw materials and/or goods to this location?

• Access to Consumers

• How close is this location to large population centers?

• What is the likely demand for your goods from those population centers?

• What will it cost to transport goods from your facility to consumers?

Environmental Factors in Industrial Site Selection

For the purposes of this blog, the category ‘environmental factors’ covers both potential environmental impacts and the general state of the location itself. Analyzing these factors prevents hidden costs, such as those associated with environmental clean up or excessive facility repairs, from cutting into your bottom line.

• Environmental Impact

• Will developing/occupying this site require the completion of any environmental or cultural resource surveys?

• How likely is it that this site will require hazardous material mitigation?

• What impact is your operation likely to have on the local ecology, neighborhood, etc.?

• Site/Facility Condition

• If there’s an existing facility you will be leasing or purchasing, what condition is it in?

• If you plan to build a new facility, what amount of new construction and landscaping are required? 

• What are the estimated time and financial costs associated with said construction?

Political Factors in Industrial Site Selection

The political factors that can impact a site’s viability vary and may include less tangible considerations like local political climate. However, the most consistent political factor at play is a site’s zoning status. If a site is not yet zoned for your proposed use, it may take significant time and effort to change.

• Zoning

• Is this site zoned appropriately for your proposed use?

• If not, is it possible to rezone it? 

• What are the estimated time and financial costs of rezoning?

• Regulations

• Are there any other municipal, state, or federal regulations or laws that could restrict or interfere with your business at this location?

Logistical Factors in Industrial Site Selection

Understanding a site’s logistics ensures it can support all of your business needs, ideally with room to accommodate future growth. If a site’s logistics are inadequate, the site selection process can also estimate the time and financial cost required to bring a given location up to the necessary standard.

• Transportation Infrastructure

• How close is the site to major roadways, railways, ports, and airports?

• Will new transportation infrastructure be required to accommodate your operations? If so, to what degree? 

• Utilities

• Does the site currently support the types and levels of utilities (water, electrical, gas, telecom, etc.) you require?

• If not, what will it take to bring sufficient utilities to the site?

Labor Factors in Industrial Site Selection

Finally, a sound industrial site selection cannot be completed without a detailed analysis of the available labor pool. For industrial sites, this often requires an assessment of not just how many potential employees an area has, but also how many of those potential employees have the skills and training your business requires.

• Labor

• What is the available labor force for this location?

• What percentage of that labor force has the necessary skills for your operation?

• What are the prevailing wage/benefit trends for this location?

Modern CRE Will Help You Find Your Optimal Industrial Location

With so many factors at play, navigating the industrial site selection process requires an expert’s steady hand. Fortunately, Modern CRE has a proven track record of helping industrial operations of all sizes find their place. We combine advanced analytics with hard-earned industry insights to ensure no stone is left unturned, providing you with a comprehensive picture of what the real estate market has to offer. 

Choose Modern CRE for your industrial real estate search, and we’ll devote ourselves to supporting your growth and prosperity as a business in whatever way we can. Contact us today to start your industrial site selection journey.