By John Jordan
While most economic news of late in this time of the coronavirus is usually described as “bleak” or “grim,” an international site selector speaking to a virtual meeting of the Orange County Partnership on July 22 indicated that the county’s prime location, available workforce and lower commercial property and housing cost will attract investment, particularly as residents and businesses abandon urban markets for the suburbs.
As part of its recently launched multi-faceted marketing effort, the Orange County Partnership hosted international site selector Didi Caldwell, president and founding principal of Global Location Strategies, on its virtual Investor Breakfast webinar to discuss industry trends as many areas of the United States continue to battle the coronavirus and what she believes locations can do to be ready once the pandemic has been arrested.
Caldwell noted that the economy’s fundamentals were strong heading into the pandemic, making this period of time different than the circumstances prior to the Great Recession in 2008.
While she said that her firm is very busy with corporate space requirements, Caldwell described the overall view of the real estate investment market as a “mixed bag.”
However, in terms of Orange County, she was much more upbeat. Caldwell, whose Greenville, SC-based firm is a member of the Site Selectors Guild, pointed to a recently released survey by the Guild that clearly indicates the suburbs are far from dead.
Released on July 16, the survey of Guild members conducted the week of June 29 found that the pandemic has brought suburban areas and mid-size cities into the forefront of consideration for future site selection projects and even put rural areas well ahead of large urban areas. When Guild members were asked about locations that are “likely” or “very likely” to be considered by corporations looking to expand, relocate or open new facilities in the next 12 months, 64% chose suburban areas, 57% chose mid-size cities, 31% chose rural areas and just 10% chose large urban areas.
Of the consultants who agreed that large urban centers are “not at all” or “unlikely” to be considered for future projects, 100% said that New York City would be among the least likely locations to be considered for future projects in the next 12 months. Los Angeles and Chicago followed with 63% and 42%, respectively. The survey was conducted the week of June 29 in partnership with Development Counsellors International.
“This (COVID-19) shock has started to have folks value living in a suburb or a smaller community where they can have a little more breathing room; where they don’t have to commute and given the position of where Orange County is, I think that really bodes well for the interest of not just residents, but also of companies that want to take advantage of the talent that is going to be moving to places like Orange County,” Caldwell predicted.
The Guild’s predicted top five most active industries for growth also served as good news for Orange County business since the number two and number three industries (Advanced Manufacturing and Food and Beverage Processing) are core strengths for the county.
Biotech and Life Sciences – 67% (down from 68% in April)
Advanced Manufacturing – 51% (up from 29% in April)
Food and Beverage Processing – 47% (up from 16% in April)
Transportation and Logistics – 44% (down from 48% in April)
Software and IT – 31% (up from 19% in April)
“One of the things that I think is very important for Orange County is in the Advanced Manufacturing and Food and Beverage Processing (sectors),” Caldwell said. “Those are unique opportunities for you as companies start to realign their supply chains and particularly with your access to such a large population base. I think that will be a big opportunity.”
Caldwell also pointed to another finding from the Site Selectors Guild survey that offers hope for an economic recovery on the horizon. Consultants reported an uptick in projects moving forward in June compared to April, with 61% of Guild members reporting that companies are moving forward with site selection projects, a 16% increase since April. Of Guild members surveyed, 34% said that companies are pausing site selection projects, and 5% reported companies are consolidating facilities or canceling site selection projects.
In closing, while Caldwell offered a simple mantra of “Keep calm and embrace the chaos,” she pointed to a host of positive demographic data that makes Orange County attractive to business.
“I see that Orange County has a really good combination of both access to dense population, but also some wide open spaces where manufacturers can feel more secure that they are not going to have a negative impact on residences,” she said. Caldwell did offer one negative—high electric rates.
She concluded, “So, if I am looking at where Orange County can compete, you have an excellent workforce pipeline that has some very good skills; you have access to a large city and you have some existing clusters you can build on. And if I were you, I would be looking at projects that are more capital intensive, that are high-paying and use a smaller footprint than some of the mega projects and a lower energy usage.”
Global Location Strategies (GLS) is one of the world’s most experienced and reputable site selection firms specializing in intensive manufacturing and industrial facilities. GLS has conducted site searches in more than 50 countries for companies with particular concentration in pharmaceuticals, advanced manufacturing, chemical/petrochemicals, metals/polymers/composites, paper, and automotive. The company offers a full suite of site selection services, including location strategy, site selection, due diligence, and incentives negotiation. Economic development services include site readiness studies, industrial site identification and workforce analysis.
Prior to Caldwell’s presentation, Michael Gilfeather, president of Orange County Bank & Trust Co. and chairman of the Board of Directors of the Orange County Partnership related that business activity is increasing and the county and the Partnership must be prepared for change.
Orange County Executive Steve Neuhaus said that he was pleased with the pipeline of businesses looking to invest in Orange County and noted that the county is seeking increased interest from residents and businesses looking to escape New York City for the suburbs. He also touted the Request for Proposals (RFP’s) that have been sent out by the county on the Camp LaGuardia property in Chester and Blooming Grove and three county-owned properties in the City of Newburgh.
Maureen Halahan, president and chief executive officer of the Orange County Partnership, reported that there are currently 55 active leads for firms interested in investing or relocating to Orange County, including 25 manufacturing firms, 11 distribution companies and two firms engaged in Agritourism. She added that there are also another 15 pending possible corporate expansions in the county and noted that despite the pandemic, 2020 could be one of the Partnership’s busiest years.
The keynote sponsor of the virtual Investor Breakfast was Advanced Testing. Other sponsors included: Langan Engineering, Capacity Marketing, Danskammer Energy, LLC and Provident Design Engineering.
