INDUSTRIAL CONSTRUCTION – SPECULATIVE OR DEMAND?
Industrial construction appears to be on the rise even with the potential of a recession looming. How much of that uptick, in construction, is due to real growth and how much is simply speculative building? According to CoStar Market Analysis, the majority of the new construction is coming from build-to-suit projects for some of the country’s largest manufacturers. For example, in Spartanburg, South Carolina, Michelin just opened a 3 million square foot distribution center. Car manufacturer, BMW, is undergoing a $600 million investment in a new building to house painting operations and adding 1,000 new employees. With these expansions, the increase in speculative development activity has increased. Developers are banking on a demand for auto parts and supporting manufacturing.
The Treasure Coast’s Role
That is wonderful news for South Carolina and tends to fly in the face of an economy suspected of heading for a recession. But what does this mean for Florida’s industrial growth? If the increase in industrial construction along the Space Coast is any indicator, Florida is on the fast track to surpass approximately 80% of the other states in raw square footage growth. With Boeing’s announcement of plans to move it’s Space and Launch headquarters to Titusville, the need for support industry is going up across the board. Along with Boeing, SpaceX is building a prototype of it’s Starship. Starship is the company’s next generation vehicle designed to transport humans and cargo into depths beyond low-Earth orbit. Its first paying customer, a Japanese billionaire, has paid for several seats on a Starship to fly around the moon no earlier than 2023.
The Mega Space Coast Town Center is a huge $200-$300 million dollar project slated to house a mixed use development. Offering retail, upscale restaurants, offices, medical facilities and green space, the Space Coast Town Center is one of the largest projects ever seen in the West Melbourne. The developers of this project are speculating that the large industrial construction sector utilizing the Space Coast will bring thousands of employees needing housing, retail, medical facilities and support service industries.
The take-away in all of this is that the Treasure Coast, Space Coast and inland communities are experiencing an incredible surge in industrial construction; both in demand and speculative. The demand for industrial land in all these areas is at an all time high. Either way, if you have been looking for an initial investment or an opportunity to expand your portfolio, now is the time to make the move. Give Treasure Coast Commercial Real Estate a call today for an individualized analysis of the market and your portfolio.