Kenosha County’s industrial vacancy rate shrinking
BY JAMES LAWSON
A gradually improving economy and heightened demand for quality industrial space have dramatically reduced the vacancy rate for existing properties and has prompted some developers to ramp up speculative construction to meet increased demand.
The Industrial Real Estate Market Report, a first-quarter 2014 study, reveals that the current vacancy rate in Kenosha County is 4.71 percent, the lowest in three years.
It is lower than the rates in neighboring Racine County to the north and Lake County across the Illinois border. The vacancy rate in Racine County is 6.1 percent; it is 9 percent in Lake County.
A shrinking vacancy rate means fewer existing industrial sites are available. Therefore, the lease rates have climbed slightly by 4.25 percent, according to the report that was authored by Jim Kettinger Jr., an associate with Lee & Associates, a commercial real estate brokerage.
Meanwhile, existing industrial sites are in demand because of start-up companies and others that want additional space or are relocating to Kenosha County, according to Kettinger.
“That’s a good sign that the companies have confidence in the economy and are seeking quality space,” Kettinger explained. “Some are attracted by the incentives that they’ve heard other companies such as Kenall Manufacturing, Amazon and Niagara Bottling have gotten.”
2013 a good year
Kettinger believes last year’s progress with many new companies either expanding or relocating to Kenosha County has stirred interest in other companies.
“Last year was a fantastic year for Kenosha County with Amazon, Kenall and those other companies that located to Pleasant Prairie and Kenosha. This year, Niagara came and that is only the beginning. Some companies see this as a great opportunity to locate near I-94,” Kettinger said.
To meet new demand, industrial developers are busy planning and constructing new spaces for prospective industrial clients.
“Some developers are going ahead with construction knowing that they will be able to find tenants for those industrial sites,” Kettinger explained.
The list of developers includes Bridge Development Partners, Majestic Realty Co., MLG Development and Venture One Real Estate.
Bridge has land in Paris and hopes it will be annexed into the city of Kenosha. Majestic has land in Somers. MLG has a proposed business park in Kenosha, west of Interstate 94, and Venture One has land in Pleasant Prairie.
Kettinger noted that some other developers such as Zilber Property Group, and CenterPoint Properties already own industrial land and is poised to launch projects.
“Many developers are interested in the area because of the very low vacancy rate and potential to compete for the next big build-to-suit project,” Kettinger said.