The WCED team has been busy over the last couple of weeks speaking with site selectors and industry experts from around the nation to gain insight on various industry trends. Members of Wake County Economic Development have traveled to Dallas and San Antonio, Texas; Greenville, South Carolina; and attended a virtual event with the Site Selectors Guild that allowed for virtual interactions with consultants across the country. Throughout the conversations and events various trends have emerged that have the attention of consultants across industries.
Quicker Timeline for Well-Capitalized Projects
The timeline from project initiation to a new facility being operational has continued to shrink if the company has already secured funding for the project. This means the need for communities to have buildings and sites with quick construction timelines is critical, placing a higher emphasis on utilityplanning and the checklist of site development items to be completed up front.
The faster timeline also highlights the need for a ready and available workforce. Talent is still a critical factor in site selection decisions, requiring a robust talent pipeline already in place when companies expand or set up operations in a new area. Thankfully, here in the Triangle with 68 people moving here a day, 44,000 graduates coming out of our universities and colleges every year, over 70,000 students currently being trained at Wake Tech Community College, and one of the highest concentrations of PhD’s in the country, we have one of the best talent stories to tell in the country.
For projects that are planning to fundraise through various means to help execute on the project plan, conversations continue, but final decisions are delayed. Current economic uncertainty around inflation, interest rates, and the economy have significantly hindered the fundraising environment for companies across the country.
Office Space/Amenities + Benefits
Across the board, consultants and industry experts have seen the demand for office either slow down or dramatically reduce in size. We have witnessed this in our own economic development project pipeline in Wake County.
There was growing consensus that the demand for office space will come back when economic conditions improve, but that it will never be the same as pre-pandemic. Companies’ footprints have reduced as hybrid models become more popular. To help draw workers back into the office, an increased priority has been placed on office amenities that exceed coffee and snacks, to create community destinations with retail, restaurants, dog parks, childcare, etc.
These amenities are intended not only to entice office tenants, but also create a destination that brings in community visitors. A restaurant on the first floor of an office building cannot be solely supported by customers who work in the office space above only three days a week. New office spaces need to become community destinations to support the amenities that can attract the office tenants and workers of those companies. True stand-alone office spaces without these features are being traded across the country in favor of less space in mix-use developments.
The office activity that is occurring today is the result of strategic office relocation decisions companies are making. Large corporations are looking at their real estate portfolios and using their lease timelines to assess the best way to reshuffle their company’s organization and operations. Most are using expiring leases to relocate offices in either a new space with more amenities or relocating to a new market to reduce costs or diversify their talent pipeline. Here in Raleigh and across Wake County, we are well positioned to take advantage of that reshuffle as our community offers both a lower cost of doing business combined with our robust talent pool.
Manufacturing, Life Science, and Some Tech Remain Strong
Outside of office, activity remains high in key industry sectors of our regional economy. While big tech has made significant layoffs nationwide, growing sectors such as clean technology and agricultural technology are continuing to flourish as they represent an increasing number of projects.
As North Carolina works to transition to a clean economy, regional organizations such as the Research Triangle Cleantech Cluster and the newly formed Research Triangle AgTech Cluster and working together with partners in workforce training, real estate development, funding, research and public-private partnerships to continue to develop an ecosystem well-poised to take advantage of these emerging industries.
The electrification of the vehicle industry, the increasing demand for semiconductors and their respective supply chains continue to remain robust across the country. New federal policies such as the CHIPS Act are encouraging reshoring of companies to the U.S.
The surge in life science activity precipitated by the pandemic has shifted since 2020 but remains just as strong. The rapid growth in the AgTech industry fits in well with our economy as it draws from our well-established agricultural, technology and nationally-recognized life science clusters.
With all the post-pandemic growth across sectors that has been witnessed in the Triangle, quicker timelines for projects are becoming the norm. Site selectors were keen to point out growing concerns nationwide regarding infrastructure and site capacity.
There have been an extremely high number of projects announced across the country over the past 2-3 years that have taken a significant number of sites (and available infrastructure) off the table for new or existing companies to occupy.
Here in Wake County, we are working with Creative Economic Development Consulting to conduct a county-wide site identification study with all 12 municipalities. This process will help us locate parcels of land to work with the towns to position as economic development opportunities. While there are a multitude of different spaces available that are entering the market, we are working proactively to have the due diligence completed on these sites to prepare them for the quick timelines we are seeing. Such a process is time intensive, so by starting now, we will be able to keep a steady flow of sites and buildings coming available in the market.
The WCED team was pleased to share these trends uncovered throughout our travels to ensure we are keeping on fingers on the pulse of what is happening across industries and markets. While we are well-positioned in each of these areas, we can never rest on our laurels as we continue to build a community of “what’s next.”