State and local incentives have become an increasingly important factor in the site selection process. This briefing examines how corporate real estate executives consider it important to research location incentives early in a project in order to maximize benefits and reduce costs. Incentives play a more significant role after a “short list” of potential locations has been determined, often seen as the “tie-breaker.”
In an environment of considerable private equity activity, this briefing discusses methods to optimize the value of real estate. Examined are timely issues such as pre-transaction strategies and post-transaction value enhancement, advantages of long-term ownership and joint ventures, sale-leasebacks, and assessing a corporate real estate portfolio.
Growth in imports, particularly from China, has generated concern about loss of U.S. competitiveness and the decline and fall of manufacturing. Far from going downhill, manufacturing continues to expand and remains a vital part of the economy. However, because the growth is coming from higher productivity rather than employment, the expansion of U.S.-based manufacturing has not led to an appreciable increase in the demand for facilities. For job growth and, by extension, greater demand for warehouse and office space, we must look at the shifts in imports, which are having a major impact on our economy’s structure.
New business location and site selection are actions that companies undertake to pursue new opportunities, either to expand or introduce new efficiencies. Current supply-chain technologies and optimization models provide increasingly powerful ways to identify these opportunities and quantify potential gains in revenues or cost savings. But, as this briefing explains, for every up-side there is always a downside.
The U.S. manufacturing sector remains a strong, vibrant and vital component of the economy that contributes importantly to growth, wealth and our standard of living. Furthermore, it remains a key component of the industrial real estate market and will continue to play a vital role for years to come.
The current trend in U.S. interest rates is essentially flat following the Federal Reserve’s decision to stop raising rates in June 2006. While we expect this trend to continue, rates are expected to budge slightly upwards rather than decline further.
Multi-national companies around the world continue to take strategic advantage of highly skilled but low-cost workers in developing countries to reduce labor costs. China and India have dominated the offshoring market – India in business processes and China in manufacturing – but other developing countries are starting to gain a foothold in the market. This briefing examines the risks of global offshoring and the aspects companies looking to export jobs need to consider when making location decisions.
Does it really make a difference where in the world you choose to locate a new operations center, research facility or headquarters? Increasingly, knowledge workers expect companies to locate close to where they want to work and live. More than ever, as this briefing reveals, your company’s success relies on analyzing and anticipating the complex location choices of the knowledge workers your company needs. Organizations that don’t pay attention will fall back in the race.
The fundamental supply and demand forces that shape the market point to further declines in vacancy and gains in rental rates, especially for office space. Employment growth will remain steady enough to propel continued growth in a national market that remains supply constrained.