Chad Navis, director of industrial investments with Kenosha, Wisconsin-based Zilber Property Group, has long closed industrial deals in Southeast Wisconsin. We recently spoke with Navis about the growing amount of industrial sales, leases and construction taking place just over the Illinois/Wisconsin state line. Navis agreed that the Southeast Wisconsin market is in the middle of an industrial boom.
CIP: When you compare the Southeast Wisconsin market of today to the one you worked in one, two or three years ago, are you seeing a lot of new industrial sales, leasing and construction activity now?
Chad Navis: Activity has certainly increased, for several reasons. One, there is a rising economic tide in general. Some manufacturers are doing better as a result of that. There has also been some pent-up demand from growth plans that several of these manufacturers had previously put on hold. Then there’s our location. The Southeast Wisconsin location continues to be a great value proposition for companies. That has been a longstanding story that has been going on for a long time.
CIP: What makes Southeast Wisconsin such a good location for companies hoping to open industrial locations?
Navis: You have access to two major metropolitan areas, the Chicago and Milwaukee markets. And you have a very favorable business climate in Wisconsin compared to some of the real estate taxes and other conditions that companies face in the state of Illinois. There is also a very strong labor force here. Companies that locate here find that they have access to a very strong workforce.
CIP: We have seen several companies moving across the border from Northern Illinois to Southeast Wisconsin in recent years. Have you seen companies making that move in reverse, heading from Southeast Wisconsin to Northern Illinois?
Navis: I can’t think of an occasion where that has happened. Once companies are here, they find out that everything that was involved in the sales pitch of this location was true. Their operating costs are lower. They are working in a nice environment. They have access to a great interstate system. Once they are in Southeast Wisconsin, they know that they have everything they need to continue to run a successful business and to grow it.
CIP: With a rising demand for industrial space in Southeast Wisconsin, are you seeing an increase, too, in the amount of spec building in this sector?
Navis: Certainly there has been an increase in spec industrial buildings here. We have seen a series of announced spec projects in Southeast Wisconsin. Zilber Property Group has just completed a 173,000-square-foot spec building in the Business Park of Kenosha. That’s an extremely active business park today. That spec building is our seventh spec industrial building in as many years. Consistently, we have been adding one spec building a year in this market. The demand has been there for these buildings. The market has warmly received these spec buildings on an annual basis.
CIP: When companies do move to Southeast Wisconsin, what sort of do they get to enjoy?
Navis: There are certain operational things, of course, that they need access to. They need interstate access, labor force access. They also want to save dollars on operating costs, which they can do here. In addition to that, they get access to such a quality workforce. That is an under-discussed story in Wisconsin. There is a long history here of a strong skilled labor in the manufacturing sector. That workforce, combined with the lower operating costs than what you see in many other locations, makes this a great place for industrial users.
CIP: What kind of building amenities can industrial users expect to find in the newer facilities being built here?
Navis: The existing buildings themselves have all of the amenities that you would expect in a major market. They are consistent with the institutional-quality buildings in Chicago and other major markets. Industrial users here want plenty of parking in the front of their industrial buildings and plenty of loading dock space in the rear of them. They want the building spaces to be flexible and energy efficient. They can find all of that in this market.
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