Commercial Investment Real Estate September/October 2019 | Page 24

POWER IN
KNOWLEDGE
Knowing an industrial project’s utility needs and the
necessary infrastructure — now and into the future —
will help ensure success.
by Grant Miller and Don Moss
F
lip a switch, the light turns on. Put a plug in a
socket, the electricity flows. Turn the faucet, water
gushes. Utilities are essential to the operation of any
property, but they are often overlooked because it’s
easy to take them for granted.
But in commercial real estate, many companies over-
look utility costs and capabilities during the site selec-
tion process. Workforce development and logistics are
hot topics in commercial real estate, but don’t overlook
other necessities.
In today’s competitive landscape, the timeframe for cor-
porate site selection from start to finish continues to tighten.
Decision-makers expect sites for new construction or build-
ings with new operations to have the necessary utility capac-
ity from the get-go. Utility providers, therefore, can add sig-
nificant value to the site-selection process by working with
communities, site selectors, and their clients to have plans
and approvals in place for system or capacity expansions.
Two sites in the same community can have very differ-
ent development and utility costs. Providers need to be
fully aware of how they assist in the site-selection process.
They also need to engage the brokerage community to
communicate capacities and discuss potential upgrades for
planned uses of the property. Such collaboration would ease
approvals and expansions, helping commercial real estate
professionals both in locating new facilities and expanding
existing ones.
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September | October 2019
Availability and Cost
By far, the most important way a utility company can
assist with site selection is fully understanding the service
availability and excess capacity to all sites and available
buildings in the community and/or communities served.
If there currently isn’t any excess capacity, the utility com-
pany needs to be prepared to expand that capacity in a
given area, depending on growth patterns.
Installing new service or adding capacity is not an
overnight process. It often requires weeks or months to
complete the entire process, which includes several layers
of approvals, cost/benefit analyses, and easement procure-
ments. Specifically, commercial real estate professionals
can easily fall into the trap of thinking that just because
a site has access to a certain utility means that the utility
can adequately serve it.
For example, if early suppression fast response means a
sprinkler system is required, a current waterline running
in front of a property might not be adequately sized with
the right pressure and flow rate in gallons per minute. This
could make the difference between installing a pump for
the sprinkler system or adding a costly water storage tank.
Knowing what a project will demand in terms of elec-
trical, water, sewer, natural gas, and telecommunication
services will allow parties to vet the site quickly and com-
pletely. Additionally, this vetting of a potential site should
be a standard practice before planning an on-site tour.