GeoPhy’s Industrial Neighborhoods Explained
How we rank 55,000 US neighborhoods
Investors in industrial real estate are becoming more sophisticated. They no longer have a challenge identifying the top “growth markets” for their investments. They are increasingly focused on selecting which submarkets are most promising.
Better yet, investors would prefer an even more granular, neighborhood-level view into these highly sought-after markets. Driving that desire for tighter views into submarkets has been the industrial sector’s performance through the COVID pandemic. Commercial real estate professionals expect industrial’s resiliency to continue, with performance driven in particular by growth in e-commerce.
This explosion of interest has made industrial deals more competitive. Investors are especially seeking smaller properties critical for rapid e-commerce delivery that are closer to consumer and commercial demand.
Leading investors are getting more granular. They want to identify specific local areas within metros – including secondary and tertiary markets – that are most promising. They want to find the best of the best. This niche is exactly where GeoPhy’s Industrial Neighborhoods come into play.
Rating an Industrial Neighborhood
GeoPhy’s Industrial Neighborhoods allow investors to spend their time wisely by focusing their energy on properties within the most worthwhile areas. They follow the same basic approach that GeoPhy has successfully developed for our 94,000 Multifamily Neighborhoods. We created Industrial Neighborhoods by identifying 55,000 Multifamily Neighborhoods that include one or more industrial properties.
For each of the Industrial Neighborhoods we collected a relevant set of metrics and created four proprietary scores to explain the attractiveness of each neighborhood. The metrics include:
- Property metrics, including the count of industrial properties by size and age
- Consumer demand metrics, including aggregate households and household income accessible within a 15- or 60-minute drive times
- Labor metrics, including labor costs and workforce availability
- Accessibility metrics, including distance to airports, ports, and city center
Finally, we also provide three scores indicating each neighborhood’s attractiveness for common industrial use cases. A fourth score indicates the area’s attractiveness from a labor perspective:
- Last-Mile Score: Access to high-income households and consumer demand
- Market-to-Market Score: Volume and frequency of freight activity
- Portal Score: Access to key airport and seaport shipping infrastructure
- Labor Score: Supply and cost of local industrial labor
GeoPhy averages the relevant metrics to come up with each individual category’s score. We then compute each neighborhood’s percentile for the individual categories compared to all other industrial neighborhoods in the country. An overall Industrial Neighborhood score averages these four categories.
Save Time on Industrial Searches
For investors, there are three primary use cases for Industrial Neighborhoods:
- You can quickly filter your high-priority markets to identify the most attractive neighborhoods within each for various types of properties
- When considering specific properties, Industrial Neighborhoods’ metrics and scores for each property determine which are worth a deeper dive
- You can evaluate your own property portfolio with Industrial Neighborhoods to make divestiture decisions or to use as a benchmark against acquisition candidates
Interested in saving time in your searches for industrial properties? Reach out and let us show you how Industrial Neighborhoods can help!