The Cincinnati area has been a busy one, especially since the start of the first quarter.
That’s the view of Mark Vella, vice president of business development with Cincinnati-based Al. Neyer.
Vella points to the growing number of industrial build-to-suit developments hitting Cincinnati and its surrounding communities. The activity is a sign, Vella says, that Cincinnati’s commercial real estate market is firmly in recovery mode.
“It had been rough the last couple of years,” Vella said. “But during the first quarter of this year, we’ve seen a significant increase in activity. We have three or four industrial build-to-suit projects going on now in the region.”
Why is this activity coming now? Vella points to the large number of vacant commercial buildings that were available in the Cincinnati market during the last three years. Many of those buildings are no longer vacant. Some were acquired, some repurposed and others released as distressed assets.
The fact that there aren’t nearly as many vacant commercial properties available has caused more companies to go the new-construction route.
“The bargain-priced, well-located vacant building doesn’t exist anymore,” Vella said.
Plenty of new projects are fueling Cincinnati’s recovery. Vella points to Peter Cremer North America, a provider of oleochemicals. The company, which already has a presence in Cincinnati, is building a new warehouse and manufacturing facility in the city. The new facility will cover 50,000 square feet of space.
“Peter Cremer is an international company. The company could do this expansion anywhere. But company officials chose Cincinnati,” Vella said.
Vella said that several factors make Cincinnati an attractive market to companies. First, there’s the city’s location and easy access to transportation. Cincinnati is convenient to most of the population of the United States. Interstates 71 and 75 pass through, making it easy for manufacturers to ship their products across the country.
The business climate throughout the state of Ohio is also a good one. Vella said that the willingness of the state and city to work with the company was one of the factors in Peter Cremer’s decision to expand in Cincinnati.
Vella says that he expects commercial real estate activity to continue to increase throughout 2013 and into 2014 here. Vacancies are heading down in all of the market’s key commercial sectors, he said.
“I think everyone has adapted to the new normal,” Vella said. “There are no more surprises for businesses and companies. There have been some concerns about how government regulations will impact companies’ ability to do business. But most companies are convinced that things aren’t going to change dramatically one way or another from where we are today.”