Industrial Site Selection Criteria In The Post Pandemic World

Author Ivan Smiljanic Read bio
Tags: commercial real estate industrial site post pandemic
Date: December 23, 2020

When determining the best industrial site selection criteria, our attention must include facilities, and several different variables to consider and evaluate. A failure to prioritize and thoroughly research all the critical issues can lead to a poor site selection decision.

Our experience provided deep relationships within the industry, for an outstanding track record of fast delivering results to companies, and a proven key factor for our clients’ success.

Industrial Site Selection Criteria – Where to start?

Identifying the most important metrics impactful to your industrial success demands a highly tailored and specific approach, rather than an unnecessarily broad one. Some of the most critical site selection criteria include human capital, real estate, tax structure, infrastructure, regulatory environment, quality of life, and incentive availability.  

There are numerous locations and ways to access all of this information, but the important part is understanding and interpreting that information in a manner that can lead to a successful site selection decision.

Data-Driven Site Selection Criteria

Using IPG’s proprietary database, we use relevant data in order to analyze and help the client score for the industrial site location. This approach also allows custom made analysis that meets every client’s need and adjusts the formula to the factors of change.  

We believe that every project is unique and that it must be evaluated based upon its own set of circumstances. By identifying the key factors impacting a project, our site selection advisors make a no-mistake decision.  With carefully designed methodology, thorough analysis, and occasional instinct, IPD leads you to a successful outcome.

It’s important to remember that in site selection criteria, one can quickly and easily get buried in numbers, attempting to decide with a glut of information, not knowing that to find the best location, you require expert analysis

First-hand experience in a site selection should never be underestimated. Seasoned professionals have seen every type of site selection scenario; their valuable knowledge is obtained from working on an array of projects and can never be replaced by any research tool.

Soft business climate Criteria

Conventional business knowledge is commonly applied when making a site selection decision, but employing a more focused, data-driven person is more likely to produce a beneficial outcome.

For example, when a company may want to expand into some region where given industries are concentrated, making an industrial cluster, and being in proximity to similar businesses, suppliers, and even competitors.  

In this situation, labor supplies are truly abundant but their demand is also strong and the competition may still hire personnel or retention is difficult. With the extensive knowledge of a real estate broker, you could find alternative locations where the availability of talented potential employees is less abundant but has a softer business demand and a friendlier business climate.

Industrial warehouse space

Daily Operations Criteria

Daily operating costs such as traffic within and to your plant and its frequency makes finished product distribution and employee movement easier. When deciding a site selection criteria, ask yourself questions that involve the plant’s operations requirements; do you need rail access or is interstate accessibility a high priority? Try to answer these questions at an early point of your site selection process, to help you clearly define the logistics of your new plant.

Utility and Water Costs Criteria

Bear in mind that the square footage of your industrial site will require, and use, a utility matrix to estimate the site’s utility requirements. These items should be also projected based on existing data.

For example, utility and water costs go “hand-in-hand” with any of the operations costs. Especially today, in the post-pandemic era, selecting an industrial site should ensure sustainability – an adequate energy supply source and a thorough review of water and wastewater requirements. Water consumption costs are heavily influenced by wastewater and surcharges so having these utilities estimated can help qualify your perspective of some site.

Distance-Based Site Selection Criteria

Identifying the location of your customers and/or distribution centers is a pinpoint that can help determine the ideal location of your new industries. You’ll need to count on the distance when making plans for transportation costs, and understanding that they can vary between inbound material and outbound products. 

You should strive to minimize the total transportation cost by simply minimizing the mileage between customers, materials, and your industrial site. However, if you have customers that demand quick product delivery – that should outweigh all other factors and result in selecting a site located at the best distance needed.

Environmental Issues in Site Selection Criteria

Environmental issues are sometimes crucial if your industrial site deals in food processing. The examination of nearby industrial sites could be also advised. And you might ask why is that?

Answering affirmatively or negatively on the existence of dust, air pollution, odors, noxious or toxic elements could result in you getting or forgetting about some industrial site.

If the industrial site is contaminated, it automatically becomes not suitable for a food processing facility. These issues are typically covered in Phase I of environmental assessment, usually orchestrated by a site consultant (real estate broker and its team). 

With decades of economic development project management and consulting experience, IPG Group has grown to provide unmatched expertise and guidance through the site selection process for companies around the globe. Contact your trustworthy realtor and get the site you deserve, and your firm needs so it could be moving forward.