For most manufacturers, relocating or expanding to a new facility is a once-in-a-generation undertaking. Get it right, and you unlock new opportunities for growth and efficiency. Get it wrong, and you’re stuck with a space that limits your potential for decades to come.
So how do you navigate the complexities of the industrial real estate market to find a facility that will position your business for long-term success? On a recent episode of the Manufacturing Executive podcast, industrial real estate veteran Pat Reilly shared his playbook for planning the perfect manufacturing move.
Reilly, a broker with JLL in St. Louis, has spent over 30 years helping manufacturers find facilities that align with their unique needs and constraints. The most common trigger he sees for a move? “Real estate pain.”
“It’s very common, of course, that a facility might be too small to support an additional product line or an investment in new equipment can’t happen because the geometry of the existing building won’t support it,” Reilly explained. “Or you’re a multi-generational business that is still making it work in the hundred-plus-year-old building that your grandparents’ company started in.”
When the limits of an existing facility start to hamper a manufacturer’s growth and efficiency, Reilly says it’s time to start the search process – and to budget more time for it than you might think.
“I would say you need a minimum of six months and ideally more like nine to 12 months to do it right,” he noted. “And that assumes a relatively simple operation, not something that in and of itself is going to take six to nine months just to move.”
That timeline encompasses everything from refining facility requirements and vetting options to negotiating deals, buildouts, and the physical move itself. Reilly advises starting the process well before any lease expirations to avoid making rushed decisions.
When it comes to evaluating facility options, Reilly stresses the importance of looking beyond just square footage and rental rates. Manufacturers need to consider a host of factors, from ceiling heights and power capacity to parking and labor availability.
Manufacturing real estate isn’t [built speculatively] like commodity bulk warehouses. The onsite factors that a manufacturer has are unique to each manufacturer. So the real estate piece, when a manufacturing client goes out and tries to solve their real estate pain, it’s going to be cats and dogs and zebras and unicorns.
To cut through the complexity, Reilly advises working closely with a real estate practitioner who can take the time to understand a manufacturer’s unique needs – and get creative in finding solutions. He shared the story of a legacy manufacturer he recently worked with to secure an off-market facility after an exhaustive search.
“The parts that it had all made so much sense for what my client did that we all just had a conversation,” he recounted. “And the landlord saw the opportunity for a long-term lease with a manufacturer who is only going to move once. It left them with space in the building that’s going to be challenging to lease, but the opportunity cost associated with having not done the deal was just too obvious.”
For manufacturers who aren’t quite ready to pull the trigger on a move, Reilly suggests a few strategies for optimizing existing space. Expanding your geographic search, staying patient but decisive as facility inventories fluctuate, and tapping your internal team for insights on workflow opportunities can all help delay the need for a new facility – or clarify what to look for when the time comes.
“There are a lot of really, really smart, creative people working out on the floors of manufacturing buildings all over the country,” Reilly added. “Talk to the people that make what you sell. Bring a couple of those people along on your site visits. You never know where a good idea is coming from.”
The common thread in all of Reilly’s advice? Treat your manufacturing facility like the strategic asset it is. Plan, vet your options carefully, and don’t hesitate to get creative in the service of your long-term goals. With the right preparation and partnerships, your next facility could set the stage for a new era of growth.
To connect with Pat Reilly and learn more about JLL’s industrial real estate services, visit jll.com or reach out via email at patrick.reilly@jll.com.
