Three words: Time is money. In our fast-paced economy, the shortest time between identifying a business growth opportunity and successfully completing a relocation or expansion project can make for the smoothest sailing through choppy business waters.
So it should be no surprise that in some site selection consultant circles, it's said that 80 to 90 percent of all location projects start with a search for available buildings.
Waiting for new construction can be like launching your sailboat in changing winds. You'll get to your port eventually, but with missed business opportunities and increased start-up costs along the way.
Whether you're looking for office or industrial space, a local real estate market can easily support or eliminate a prospective site.
According to CB Richard Ellis' quarterly surveys, over half of the major industrial markets in the U.S. showed declines in available industrial space (based on properties that can accommodate a tenant requiring 100,000 square feet or more) between the fourth quarters of 1997 and 1998.
Meanwhile, construction of large industrial buildings increased 113 percent in 1998.
Due to limited new construction in the office-space market but continued demand, nearly 60 percent of these same market areas experienced declines in vacant office space over the same period (based on major competitive multitenant office buildings).
While available buildings can minimize start-up costs and time, construction costs
are not your only facilities concern.
Over time, those costs may not impact as much as building maintenance and repair costs.
In fact, according to Whitestone Research, maintenance and repair costs can actually exceed construction costs over a building's lifetime (50 years).
Whitestone takes a comparative look at these costs across 116 major U.S. metropolitan areas.
Maintenance and repair costs of potential sites, as well as industrial and office markets, can help protect a company's financial hull.
Les Gramkow is research editor for Expansion Management Magazine.
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