The term “critical infrastructure” often refers to bridges, highways, ports, power grids, water systems, and the like. All these things are essential to our modern way of life, but they don’t create regional prosperity on their own. Businesses require places where they can manufacture goods, store inventory, import and export shipments, and process data. Industrial real estate takes that critical infrastructure and gives it vital context through economic activity.
A well-planned, well-positioned industrial property supports much more than the company that occupies it. For every factory or warehouse that pops up, a need for support services springs up around it. From maintenance contractors to delivery providers to waste management services, industrial facilities drive ancillary demand for other businesses in the surrounding region, acting as clusters that bring jobs, investment, and expertise to the local area.
Building a Foundation for Job Growth
When you look at headlines over the last few decades, there is a persistent narrative that manufacturing is on the decline in the U.S. However, the industry is still a major contributor to the economy. According to the National Association of Manufacturers, the sector adds “$3 trillion of value to the American economy every year” and provides 13 million jobs.
Communities and economic development organizations put in significant effort to lure factories, warehouses, and data centers to their areas. However, without sufficient water, power, and transportation access and facility layouts that can accommodate modern equipment, staying competitive is easier said than done.
This is why it’s important for community leaders and property owners to collaborate and take an active role in preserving and modernizing industrial properties. While constructing facilities from the ground up requires extensive planning, permitting, and infrastructure development, oftentimes there is an underutilized plant or distribution center that already has most of the attributes a prospective tenant or new owner is looking for. With a few strategic improvements, dedicated stakeholders can provide a faster, more cost-effective path to live operation while also returning dormant property to active use.
“Industrial real estate should be viewed as part of your community’s economic infrastructure,” says Frank P. Crivello, chairman and founder of Phoenix Investors. “These properties create capacity for businesses to invest, hire, and grow. When we return an unused or underused property to productive use, the benefits extend well beyond strengthening the local tax base. We support regional economies, boost supply chains, and create new opportunities for workers.”
The Connection Between Industrial Investment and Community Renewal
The value of industrial real estate is very visible in communities with legacy manufacturing assets. Many U.S. towns and smaller cities sprang up around thriving factories decades ago, and those empty factories have since become symbols of economic decline. However, what community leaders and residents often don’t realize is that these assets still have value for their size, existing utility connections, and proximity to established transportation corridors.
As an example, Phoenix Investors recently revitalized an industrial complex in West Milwaukee, Wisconsin, with more than 750,000 square feet of combined building space, some of which were more than a century old. The overhauled space preserves many of the historic elements the community is fond of while also modernizing the facilities for new industrial tenants. The restored area is expected to bring jobs back to the area and help to boost the local economy.
This project offers an important lesson about coordinating with local leaders and residents to address the needs of the regional economy. Those needs can vary based on the types of properties available:
- Small-scale manufacturing facilities can bring cleaner, quieter production jobs close to home for residents.
- Large-scale manufacturing and distribution facilities can act as an anchor for broader supply networks.
- Data centers can generate large tax revenues and encourage local investment in power and infrastructure.
With careful analysis of the facilities and what they can be modified to support, communities can get a sense of what benefits a revitalization effort might bring.
Getting Ready for Whatever Comes Next
No region can predict exactly what industries will take off and drive the economy decades into the future. Consumer demand, trade relationships, and technology trends will continue to shift and drive demand for facilities that can support new needs.
Communities can prepare for this uncertainty by maintaining a diverse inventory of industrial properties that are ready to be adapted to a diverse range of needs. Regional leaders can support this effort by developing relationships with utilities, workforce organizations, community colleges and trade schools, economic development agencies, and real estate organizations.
Regions that can offer this flexibility will set themselves up to thrive in an increasingly connected world where an industrial operation might need highway access, consistent electricity, broadband connectivity, and specialized labor just to support its daily needs. In return, those industrial operations will inspire growth in related industries, offering more jobs and opportunities to the area.
By revitalizing strategically located legacy industrial sites, communities and investors will ultimately establish a strong foundation for growth.
About Phoenix Investors
Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations, and public stakeholders, Phoenix has developed a proven track record of generating superior risk-adjusted returns while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost-efficient solutions, and a reputation for success.
Mr. Frank P. Crivello began his real estate career in 1982, focusing his investments in multifamily, office, industrial, and shopping center developments across the United States. From 1994 to 2008, Mr. Crivello assisted Phoenix Investors in its execution of its then business model of acquiring net lease commercial real estate across the United States. Since 2009, Mr. Crivello has assisted Phoenix Investors in the shift of its core focus to the acquisition of industrial real estate and data center assets throughout the country.
Given his extensive experience in all aspects of commercial real estate, Mr. Crivello provides strategic and operational input to Phoenix Investors and its affiliated companies.
Mr. Crivello received a B.A., Magna Cum Laude, from Brown University and the London School of Economics, while completing a double major in Economics and Political Science; he is a member of Phi Beta Kappa. Outside of his business interests, Mr. Crivello invests his time, energy, and financial support across a wide net of charitable projects and organizations.