Yakima County Development Association - Corporate Real Estate Executives Seeing Economic Rebound

Jonathan Smith

The President’s Pen is a weekly blog written by Jonathan Smith, New Vision’s President and CEO about local economic development projects and initiatives. It also covers economic trends, workforce issues, business climate policies, and manufacturing news. 

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Corporate Real Estate Executives Seeing Economic Rebound

August 19, 2011

Over the last few months we have talked with quite a few site selectors who help businesses choose locations for new facilities.  There are hundreds of these corporate real estate executives across the country and research suggests they influence somewhere between 30-50 percent of all business expansion projects in the United States.  We worked with site selectors on the Wal-Mart Distribution project and have also connected with them on call center projects locating in our area.  It pays dividends to stay in touch with these professionals and we are contacting a couple site selectors on average each month as part of our business recruitment efforts.

In our recent conversations we have found that site selectors are seeing economic activity pick up.  Most of them starting seeing more expansion projects last year making up for a dismal year in 2009.  In our conversation with Sheri Mullis she indicated that the aerospace, food processing and distribution sectors are all fairly healthy and driving their site selection work.  Mullis works with her husband Mike at JM Mullis Company.  Mark Sweeney with McCallum Sweeney Consulting has also seen a noticeable uptick in expansion activity.  Mark's firm helped Boeing as the company decided where to build their dreamliner 787 airplane.  Sweeney did indicate that that 30-40 percent of the projects that they have worked on recently are on hold.  He said economic uncertainty is the biggest reason why companies are holding back on expansion projects.  We found this was a common sentiment among site selectors we talked with.

Many of the site selectors we contacted said that logistics is of paramount importance to companies right now.  With gas and energy prices up substantially firms are choosing locations closer to their suppliers or customers.  Manufacturers are also closely evaluating how distribution costs plays into their expansion or relocation projects.  Dean Foote, one of the site selectors we worked with on the Wal-Mart Distribution center project, said he is seeing more West Coast expansion activity as a result of increasing Asian investment interest.  These projects put a premium on logistics as the interface between west coast ports, plant sites, and final product markets is especially critical to Pacific rim companies (or investors).

Several site selectors mentioned the importance of preparation.  They indicated that communities that can respond quickly and professionally to companies stand out during the site selection process.  Most of these corporate real estate consultants shop online first discreetly evaluating dozens of regions before creating a short list of communities that get more attention.  If you receive calls or proposals from these  professionals it is likely that you are on the short list for a project.  At this point, how well each area presents its assets and matches those towards a company's needs typically determines where the project will be located.  Mike Michalski from the Vericitas Group said that responsiveness is more important than ever.  Economic uncertainty and risk can be offset by communities that offer resources and partnerships to address these issues.

We will makes sales calls on 20-25 site selectors this year.  Our office also sends quarterly enewsletters to approximately 150 site selectors that we have met over time.  We will also occasionally take trips to meet with site selectors.  All these strategies help us stay in touch with these influential advisors and more importantly our marketing efforts work to ensure that Yakima County stays on these professionals' radar screen for current of future expansion projects.

 

 


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"The [Enterprise Challenge] business plan contest was really a kick start. I think the best part of the contest was that you could look at your dream and turn it into a real business." - Carol VanEvenhoven, Co-Owner, Hop Central Brewing Company