Demand for industrial buildings in Hamilton County continues despite high levels of new construction. Quarterly statistics provided by Costar, a real estate information company, show industrial vacancy rates in Cincinnati and the surrounding County have been dropping starting in 2012 and are at a record low 2.3%. This is coupled with far above average new construction in 2016-2018.
E-commerce is fueling significant new demand for warehouse and distribution. Yet many communities are concerned that fulfillment centers will bring fewer jobs than other industrial users. Another driver of new industrial development is existing companies that have delayed real estate decisions for many years. They require larger facilities but there is simply nothing available. Communities are eager to retain these manufacturing companies with above average wages but are skeptical to support industrial projects with unknown end users. First ring suburb municipalities are often built-out with little land available for new construction. Some local governments have responded by becoming more aggressive. They are purchasing properties and learning more about development impediments at promising locations. Coupled with unemployment rates at record lows of 3.8% both local and nationally, both communities and companies are facing unprecedented competition for talent and real estate alike. High levels of uncertainty and risk often keep all but the most highly experienced speculative investors from initiating new industrial construction projects. We have been meeting with communities to discuss the use of various tools and strategies to assure that land and buildings are utilized to their highest potential. Various incentives, grants, and financial resources are available to projects that creates jobs and address a local community plan.
