With a New Year on the Horizon, the Light Manufacturing, Industrial, and Distribution Markets Continue to Shape the UpstateDec 05, 2023 11:55AM ● By Greg Blinston and Mark Cothran
If there is a fact about Upstate South Carolina’s business landscape that most strongly connects its past and present, it is arguably the region’s ability to produce and maintain world-class products.
Although our days of being known as a thriving international hub for textiles have come and gone, the Upstate continues to attract healthy and diverse operations in the light manufacturing, industrial, and distribution markets decades later.
Last year, a national report by CBRE focused on the industrial market named the Greenville-Spartanburg metro a top 10 location based on number of leasing transactions for warehouse and distribution space, putting us among the ranks of major markets like Atlanta and Chicago.
Large corporations including BMW, Lockheed Martin, Michelin, and Milliken continue to help fuel this growth while spurring second- and third-tier market needs, many of which are often considered “light industrial” operations. As these and other large operations grow, so does the need for nearby suppliers to deliver parts just in time.
Lasting impacts from the pandemic have also contributed to industrial growth due to the realization that procurement of goods and materials from abroad comes with higher risks and potential delays. On top of that, population growth and a healthy economy have helped create an ideal climate for a robust and advancing market.
As we prepare to enter a new year, it’s an exciting time to consider where our region has been and where it’s going in terms of light manufacturing, industrial, and distribution opportunities.
What’s inside the box
Generally speaking, the light manufacturing, industrial, and distribution markets encompass operations performed within an enclosed building rather than outdoors using heavy equipment and plants. In the Upstate, this could include anything from a site to build corrugated boxes to one that assembles small parts for the automotive or aviation markets. The possibilities are nearly endless when you consider other niche uses such as the need to clean commercial beverage containers or even to store flooring materials.
While there is a need for many “big box” distribution buildings for larger operations, light manufacturing and industrial builds are generally similar in construction type but more around the size of 80,000 to 180,000 square feet. These structures typically include space for operations, storage, the possible addition of larger machinery, and office areas for onsite personnel.
To the average person, these buildings generally look the same but in reality, none are created equal. As Trehel and Cothran Properties continue to work increasingly in these markets, we like to think of them each as a unique Swiss Army knife, ready to support multiple tenants and operational needs. Further flexibility may also be needed due to changing circumstances and unforeseen market developments.
Evolving conditions and continued growth
Heading into the new year, the light manufacturing, industrial, and distribution markets will continue to see notable stratification. Some companies will continue to deal with potential overinvestment as well as prolonged supply chain issues. Tenants will pivot in terms of how their space is being used, which could include adding new capabilities or potentially renting out previously leased space altogether. And while years past have seen a significant number of industrial buildings being built to sell, this will likely slow down due to climbing interest rates.
Despite changing conditions, the overall industrial market is still primed for growth not just in the Upstate, but in the Midlands and along the coast as well. Forthcoming statewide growth will, in part, be fueled by the large number of operations along the I-85 corridor and their proximity to the Inland Port in Greer. The Inland Port continues to expand, and recently handled 16,857 rail moves in the month of August 2023 alone, marking the most moves in its history and a 52 percent increase year-over-year.
As the number and size of operations increase, aligning with local partners will remain important. Doing so will ensure access to proper market knowledge, quick answers to complex issues, and avoiding a long chain of command often associated with out-of-town contacts. While many operations have global reach, aligning with the right team on the ground will remain critical.
Although not every business is positioned to become a part of the light manufacturing, industrial and distribution markets, understanding their continued impact will benefit any business leader as we collectively consider what’s next for the Upstate. Our history in textiles continues to lay the foundation for a bright future, and both Trehel and Cothran Properties look forward to seeing what list Greenville-Spartanburg makes next as it relates to growth of the light manufacturing, industrial and distribution markets.
Greg Blinston is vice president and senior project manager at Trehel and oversees many of the general contractor’s industrial projects across the Upstate. Mark Cothran is founder and CEO of Cothran Properties with a current focus on acquiring land and property to develop Class-A industrial and spec buildings for single and multi-tenant occupants.