When the 16th Annual Forecast Conference goes into breakout sessions on Wednesday, January 17, Dan Brown, the founder of Brown Commercial Group, will make his first appearance as a speaker at the event.
Since 2004, Brown and his company have filled a niche in the suburban industrial and office markets representing the interests of small- to mid-size users and property owners in leasing and acquiring space.
As a preface to his appearance as part of the industrial market breakout session, Brown answered a series of question on what this segment of the market is looking at in 2018 and beyond.
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REJOURNALS: What is the general sentiment of the small- to mid-size users in the marketplace?
BROWN: We are seeing many small- to mid-size business owners expanding their businesses and looking to take on more space. Some are looking ahead to their 3-to 5-year growth projections and adding the extra space now and leasing it out. This approach provides tremendous flexibility for the business to “grow in place” and move into that space as their growth takes shape. It also allows owners to gain the investment advantage in today’s real estate market.
REJOURNALS: What types of small- to mid-size businesses do you see flourishing the most? Are there hot industries right now?
BROWN: There are many logistics businesses that are flourishing—companies that are involved in e-commerce, trucking and general distribution of goods, for example. We’re also seeing a lot of mid-sized businesses involved in light manufacturing that are growing as well.
The growth in e-commerce has created a ripple effect across many other industries, from packaging to storage to deliveries. The construction is just now slowing down a little from the large expansion in new warehouse space that occurred, in large part, because of e-commerce needs.
REJOURNALS: What gives small- to mid-size users the greatest optimism for 2018? What gives them the greatest concern?
BROWN: Businesses are optimistic about 2018 because of the Chicago region’s strong employment numbers and the overall health of the economy. In the industrial sector, logistics-related businesses are doing well, in part because of all the activity from e-commerce and related business expansion.
We’re also seeing many mid-sized companies with established business lines looking for additional space for a new product line or to support growth in a new geographic area. Many businesses have capital they are ready to deploy into new or expanded facilities.
The main uncertainty I see centers around planning for growth. Some business owners are uneasy about planning 5 to 7 years out because they aren’t sure how long this strong economy will continue. There also is a shortage of labor in many areas and we are seeing companies having to pay more to get the help they need. And, if they expand into other territories or open new facilities, will they find the right employees to fill the jobs?
Register now for the 16th Annual Commercial Real Estate Forecast!
