Location. Location. Location. Once the be-all and end-all for industrial real estate site selection, location is actually only a fraction of the equation. So, when it comes to industrial site selection, it's easy to see why identifying the right facility location is the number one rule in real estate. But don’t overlook the rest of the equation -- transportation, labor and logistics – because, in this case, the whole is greater than the sum of its parts.
Real estate only accounts for about 5-8% of operating costs for industrial occupiers, while logistics—freight, labor and inventory—account for up to 80%. That’s why it’s important to reduce operational costs to offset the sticker shock of rising industrial rent prices; historically low vacancy rates contributed to high rents of $8.80 per square foot in Q4 2022, according to JLL research.
Look at the big picture for finding your ideal property: How much space do you need? Where are your customers located? How much do you import? These are only a few of the questions you must consider to prepare for supply chain disruptions, maintain resilience and keep your costs down.
Location is just one of many things you need to consider when site shopping. Here are four other key areas that can help you balance supply chain expenses and facilities costs.
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