In its third quarter industrial market update, Pewaukee-based real estate brokerage Judson & Associates says that there are still “several large users circulating in the (Kenosha County) market.”
Kenosha County has been a hot industrial real estate market. Major developments announced recently include: Amazon.com’s plans to build a 1-million-square-foot distribution center in Kenosha, Kenall Manufacturing Co.’s plans to move from Gurnee, Ill. to a new 354,000-square-foot plant that will be built in Kenosha, and Hanna Cylinders’ plans to move its operations from Libertyville, Ill. to a 105,637-square-foot facility that it will lease in Pleasant Prairie.
“Kenosha County continues to be the strongest market of interest for projects in the 100,000-square-foot-plus range as well as outside investment,” said the Judson & Associates report, written by vice president Jeff Hoffman.
“There will be some more large announcements (in Kenosha County) coming over the next two quarters,” Hoffman said.
Kenosha County is in the “right place at the right time,” Hoffman says as the Chicago area continues to grow and land available for new industrial buildings is increasingly scarce south of the state line. By comparison land for development is cheap and abundant in Kenosha County, he said.
Efforts to attract firms to Kenosha County has shifted from the city of Chicago to Lake County, Hoffman said, because those businesses are willing to make a shorter move in order to maintain their employees.
The industrial space vacancy rate in Kenosha County is down to 4.4 percent, according to Xceligent. The industrial space vacancy rate is even lower (3.7 percent) in Waukesha County, which had 393,782 square feet of positive absorption in the third quarter.
For all of southeastern Wisconsin, the third quarter industrial space vacancy rate was at 6.0 percent at the market absorbed 1.4 million square feet of space in the quarter, according to Xceligent.
“At 6 percent overall vacancy in the industrial marketplace, a spec building is no longer a four-letter word,” Hoffman wrote in the Judson report. “With a diminished supply, expect private sector industrial construction to show strong improvement in 2014.”
A new state tax credit that is being phased in will reduce the state corporate income tax rate for manufacturers from 7.9 percent to 0.4 percent. That is encouraging manufacturers in the area to move forward with plans to expand or move to larger facilities, Hoffman said.