Selecting the best possible site for a flex space development involves thorough pre-work. The following guidelines help developers make informed decisions:
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Market Demand and Supply Analysis
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- Occupancy Rates: Flex space properties, usually ranging from 25,000 to 75,000 square feet, often yield high occupancy rates. This suggests that there is a strong demand across the market.
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- Development Trends: Despite being in strong demand, new developments in the flex space sector are limited, making up only about 5% of the total industrial space under construction.
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Location and Accessibility
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- Transportation Infrastructure: Proximity to major interstates, highways, and rail services ensures efficient logistics. Using tools like Union Pacific’s Site Solutions can help developers locate rail-served sites.
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- Strategic Positioning: Locations that offer flexibility and scalability are more appealing to a diverse tenant base.
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Due Diligence and Environmental Assessments
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- Environmental Site Assessments (ESA): Conduct Phase I ESAs to ensure the property is free from contamination and environmental liabilities.
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Infrastructure and Utilities
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- Site Readiness: Ensure the necessary utilities and infrastructure are available to promote operational efficiency.
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Regulatory Compliance
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- Zoning and Permitting: Understand local zoning laws and obtain the necessary permits, as these steps are essential during the development process.
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Labor and Workforce Availability
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- Local Labor Pools: Assess the availability of a skilled workforce in the vicinity, as their presence can impact operational success.
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Financial Considerations
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- Cost of Capital: Evaluate financing options and associated costs related to budgeting and financial planning.
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- Incentives: Explore local and state incentives. These can provide financial benefits and support project feasibility.
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Community and Economic Impact
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- Local Economic Growth: Developments that contribute positively to the local economy and job market are more likely to receive community support.
By evaluating these factors, developers can navigate the complexities of site selection and position their small bay industrial projects for success.
Content developed in conjunction with Cody Payne and Michael Tran of Flex Parks USA.
