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Would You Believe Industrial Buildings Are Moving to the Suburbs?

Posted by Sean Murphy on Apr 22, 2019

The suburbs are not just for homes and retail anymore. Industrial companies, typically targets for downtowns and business parks, are making their way into the suburbs as cities rezone areas for these types of properties. The suburbs have turned into a center of business activity that includes industrial and manufacturing centers.

The most challenging aspect of logistics for e-commerce is last-mile delivery. This is the final step of the process in the “out for delivery” stage to get the package on the customer’s door. It’s the most expensive part of the shipping process. According to Business Insider, last-mile delivery makes up 53 percent of the overall shipping cost. Yes, over half of the shipping cost!

Benefits of Industrial Facilities the Suburbs

What’s leading to this change? Location, location, location. The rising cost of transportation drives companies to move closer to their customers, especially e-commerce companies. A PwC survey
finds that customers expect to receive their purchases within 1 and 5 days. To meet customers’ demand for fast delivery, e-commerce companies are building distribution centers in or near residential areas.

Building logistics facilities in the suburbs helps with the last mile problem. The suburb gains economic benefits such as more jobs for its residents. Residents benefit from receiving their purchases faster and cheaper or free. People also want to live closer to where they work. It’s a win for all.

What Does This Mean for Commercial Property Owners?

For those who plan to locate to the suburbs, here are the expert recommendations before you build or relocate:

  • Prepare for the future: Design a space that’s flexible and spacious enough for future growth. You want flexibility in case it ever needs reconfiguring.
  • Review transportation: Look for locations near major highways or transportation hubs to maximize the infrastructure.
  • Check the labor pool: As you select a site, you want to tap into the local labor pool and strategically place the building in a spot that will ease commutes.
  • Explore incentives: Many municipalities offer incentives to bring companies to town with promises of jobs for their residents.

If you have a vacant retail center in the suburbs not used for logistics, it may be possible to convert it into a warehouse. Whichever route you take, another factor to consider is adding security. Security like live video monitoring to protect its valuable assets. This makes a building more attractive to buyers and tenants.

To learn more about remote video monitoring for industrial facilities, please contact us here.