Good News for Dalton!

Good News for Dalton: Nationwide, Industrial Real Estate Going Full Steam Ahead

Dalton Blog

At NAIOP Development ’14, the industrial commercial real estate conference held in Denver, Colorado in early November, industry leaders celebrated the strong fundamentals visible across the country.  Craig Meyer, president of Jones Lang LaSalle Industrial, began his speech boasting the industrial sector’s 18 quarters of consecutive absorption and 7% vacancy rate nationwide.

Bill Hankowsky, chairman and CEO of Liberty Property Trust, said his firm’s business has “flipped from being a predominantly office company to a predominantly industrial company… Development is our goal now—not acquiring.” Hankowsky added that “It’s pretty hard to find very good land in most markets, and as e-commerce increases, labor costs become a bigger issue. Lots of metros are filled out, and every piece is owned by a developer who’s going to use it.”

That is just another reason why a tertiary market like Dalton is such a prime place for industry.  Developers are looking to build out good properties, and what better place than Dalton?  Among other things, Dalton’s ease of access to both the Interstate highway system and rail, benefit from one of the lowest tax rates in the state of Georgia, and personalized relocation support services from the Dalton-Whitfield Joint Economic Development Authority make Dalton the right choice for industry.

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Barrett Properties has a uniquely positioned portfolio with increasing interest from such industrial tenants.  It is an exciting time with all of the new growth in the industrial sector, but, some may ask, where is it all coming from?

In the same week in a slightly warmer climate at Real Share Industrial 2015, held at the Viceroy Miami, Michael Brennan, chairman and managing principal of Brennan Investment Group, shared what he considered the five biggest growth engines of the industrial sector right now:

1. Automakers. The government-backed resurgence of American automakers, claimed Brennan (one of the few economic feats to which the Wall Street Journal credits the current administration), has put U.S. automakers’ costs on equal footing with foreign competitors. “Putting the auto industry back on track was important for industrial real estate because they have a long supply chain,” explained Brennan.  Dalton knows the measurable benefits of that long supply chain thanks to the Volkswagen plant in Chattanooga, whose ramp up in production has manufacturers and suppliers vying for proximity and a piece of the action—often in nearby Dalton.

2. Housing. The housing market is back on its feet, and while single family residential starts are still sluggish, multifamily is making up much of that difference.

3. Energy. New technologies, noted Brennan, have brought enormous demand for new machines, retrieval equipment, and everything else needed to build the infrastructure in the energy business.

4. Banking. With over $1 Trillion new nationwide loan originations reported in October, it is easy to see how a retooled banking industry and still historically low interest rates are benefitting the industrial sector.

5. China. U.S. energy costs are cheaper, especially natural gas, and the U.S. is introducing more automation as well.  China’s increasing domestic demand means “they are not as willing to make dresses for one dollar,” says Brennan. “Now you have to pay five dollars.”

Fundamentals are healthy across the country, Brennan said, and demand is still very high in most submarkets with drivers that are strong on the demand side for now.  In addition, let’s not forget e-commerce, data centers, and recycling plants, each of which are driving new growth in industrial.  Again, due to its value and strategic position, Dalton will likely see new tenants with unique needs in our evolving global marketplace. Barrett Properties’ is proud to have the experience and track record of success working with a variety of industrial tenants—from build out to 24/7 on-call property management.  With such positive indicators from the nation’s leading industrial sector leaders, things could get even more exciting in Dalton in the near future..

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