Rising Real Estate and Construction Costs Lead Businesses to Look at East Kentucky
Monday, April 15, 2019
Businesses throughout the country, and in Mid-Atlantic cities like Philadelphia, are facing rising industrial real estate and construction costs. High prices may make it difficult for companies to grow and expand in their current location.
The increase demand for warehouse space by fulfillment centers is partially to blame. With companies like Amazon and Walmart increasing their online business, the need for additional fulfillment centers has placed pressure on industrial land, limiting the supply of available land and industrial buildings for manufacturing companies (O'Keefe, 2018). According to Alessandro (Alex) Conte, Executive Vice President, Blau & Berg Company, this trend has led to changes in New Jersey’s industrial real estate market with base rent going up by 11 percent and third-quarter vacancy rates dropping to 3.38 percent (Real Estate NJ’s 2019 Market Forecast, 2019).
In Philadelphia, it is the cost of construction, in addition to a lack of commercial property, that has caused prices to rise. Douglas Green, Managing Principal of MSC Retail told Philadelphia Magazine, “Construction costs in Philadelphia have reached untenable levels” (Althouse, 2019). This is preventing some companies from moving into or expanding in the region, forcing them to look outside of the Mid-Atlantic for a headquarters or satellite space that can fulfil their needs.
East Kentucky Has an Abundance of Commercial Land
Fortunately, companies do not need to look far to locate a state with an abundance of commercial space. East Kentucky is ideal for expansion because of its convenient location, easy access to the interstate, rail access, and port facilities. Plus, existing business parks have plenty of room for expansion. Executives and site selectors are encouraged to explore the region and area properties, including:
- Coal Fields Industrial Park – 380 acres
- Eastern Kentucky Business Park - 180 acres
- Gateway Industrial Park - 260 acres
- Kentucky Enterprise Industrial Park - 400 acres
- Martin Industrial Building – 55,000 sq. feet
- Eastern Kentucky Spec Building - 45,000 sq. feet
A full list of available properties can be found here.
In addition to an abundance of space, businesses can save money by building in East Kentucky since our labor rates are below the national average. Businesses may also be able to take advantage of various financial incentives offered by the state of Kentucky as well as local governments.
Executives and site selectors interested in East Kentucky real estate or learning more about the benefits of moving out of the Mid-Atlantic and into East Kentucky, should contact Chuck Sexton, President and CEO of One East Kentucky.
One East Kentucky
Althouse, M. (2019, February 11). The 7 Problems Holding Back Philly Businesses. Retrieved from Philadelphia Magazine: https://www.phillymag.com/business/2019/02/11/problems-challenges-facing-philadelphia-businesses/
Carrick, A. (2018, September 5). U.S. Construction Costs Are Soaring. Retrieved from Construction Connect: https://www.constructconnect.com/blog/economy/u-s-construction-costs-soaring/
O'Keefe, L. (2018, February 27). Land Prices Soar As The Warehouse Boom Transforms Traditional Farming, Factory Communities. Retrieved from BISNOW: https://www.bisnow.com/national/news/industrial/this-is-how-e-commerce-is-changing-farming-communities-85521
Real Estate NJ’s 2019 Market Forecast. (2019, January 14). Retrieved from Real Estate NJ: https://re-nj.com/real-estate-njs-2019-market-forecast/