Distribution and Logistics Management is a growing and developing segment for the Dayton-Cincinnati region entering 2014. Over the past five years, there have been several new facilities that have been developed along the Interstate 70/75 corridors including:
- Payless Shoes – distribution warehouse
- Caterpillar – distribution warehouse
- Carter Express – distribution warehouse
- Procter & Gamble – distribution warehouse
- Meijer – planned expansion
- Abbott Labs – manufacturing facility
- White Castle – manufacturing facility
There has also been an increase in occupancy levels in the North Dayton and the Upper Valley regions during this same period. According to the Miller-Valentine Group Realty Services market survey, since 2010, the Dayton region has seen positive absorption trends in the industrial warehouse market led by both the North Dayton and Upper Valley regions.
This trend appears to be consistent with the high demand and the increased number of inquiries from companies seeking both land and space/buildings in the region. Many of these users are looking at the areas along Interstate 70 from Springfield, Fairborn, and I-675 in the east, to Brookville, Clayton/Englewood/Union, and Vandalia in the west. This trend is also being observed from north Dayton along Interstate 75 to Tipp City, Troy, Piqua, and Sidney.
What is attracting these users to the region?
We believe some of the critical factors being considered by companies include the costs of labor, property and utilities, as well as infrastructure/attractiveness, incentives, and connectivity.
Land and Property Costs
- Land is plentiful and reasonably priced. Industrial manufacturing and distribution land costs are well below land prices for competing cities with an average price per acre at $30-50,000/acre.
- The cost for construction ranks below most competing markets.
- Acquisition prices for Office and Industrial real estate below most competing markets.
- Rental rates for Office and Industrial real estate below most competing markets (Office – $1.50 to $7.00 sqft less and Industrial – $0.50 to 2.00/sqft less)
Labor and Attractiveness
The Dayton-Cincinnati region is a business-friendly community with appropriate workforce to support growth. Other features include:
- The region is rich with 11 colleges, both private and public.
- The labor force includes a higher blue collar employment concentration than the U.S. average.
- Labor Rates are generally at or below the national averages (Annual mean wage $44,600 and Hourly $16.72.)
- There is declining unionization (currently at 5.2% below the national average of 6.6%.)
- The area is one of the lowest costing business locations in the U.S., ranking well below the national average in costs of food, housing, and healthcare, as well as in overall tax burden.
- Culturally accepting communities.
Proximity to major markets
Site Selection Magazine considers proximity to industry and consumers to be the most important factor for companies looking for sites in North America. The Dayton-Cincinnati region is considered to maintain an ideal location serving the North American market. Other features include:
- Centrally Located – The region is a well-connected location for accessing suppliers and customers.
- The Dayton-Cincinnati region is within 1 day’s drive of 60% of the U.S. and Canadian population.
- The region is a 1 day’s drive to 70% of the nation’s manufacturing capacity— machinery, automobiles, plastics, appliances, and steel.
- The region straddles two major NAFTA Trade Corridors connecting the Atlantic and Central Eastern corridors.
Connectivity – Inter-Modal
The Dayton-Cincinnati region offers an efficient and internationally recognized infrastructure that moves products and materials. Our intermodal hub fits into virtually all distribution network configurations for the Continental U.S. Our region’s features include:
- Five interstate highways
- Six international airports within a two-hour radius and some of the world’s largest public and private airports dedicated solely to cargo shipment.
- One of the highest rail freight traffic patterns in the U.S.
- Twenty-five ports and terminals within 11 to 12 hours of drive-time. All major East Coast (ocean & inland) ports.
- Expansion of the Panama Canal, which is doubling the capacity of the Panama Canal by 2015, will allow larger vessels to transit the canal. The project is expected to create demand for eastern seaports to handle post-Panamax ships connecting both the European and Asian markets. Panama Canal expansion impact will be felt in several market segments, most importantly the Agribusiness trade, Ohio’s largest industry with over $50 billion a year.
What can we do better as a region to continue to attract companies?
- Keep Things Simple – International companies want to deal with a single coordinated team and the quality of facilitation can be the difference between winning and losing a project. The U.S. market can be intimidating and confusing with different state policies and tax regulations.
- Rail – Maintain good relationships with rail providers such as CSX, Norfolk Southern and Indiana Ohio Rail for possible future intermodal capability.
- Supply Chain – Leveraging existing companies.
- Emerging Synergy – A key opportunity is addressing the Asian and European market needs as they converge in the Dayton-Cincinnati region. The region is a key area for auto suppliers as many want to align with Toyota in Kentucky, Honda in Indiana and Ohio and GM/Ford in Michigan.