Industrial Analysis

AGA industrial studies are analogous in many respects to our investigation of area office markets.  We implement our highly-refined industrial econometric model to calculate industrial vacancy rate and project demand for new industrial facilities.  This statistical investigation is typically accompanied by local broker data or a field survey of area industrial facilities conducted by senior members of AGA.


AGA Industrial Model
Our statistical modeling system serves as the foundation of our industrial analysis.  The industrial model projects demand on the basis of increases (decreases) in employment in selected categories of nonagricultural wage and salary employment—principally manufacturing, wholesaling, and contract construction.  Changes in the targeted employment categories are converted to demand for industrial space on the basis of typical industry-specific space use coefficients (per employee) developed by AGA based on ongoing research over the past 40 years.  A share of regional demand is assigned to the site area (and specific project) on the basis of location, competition, access, building sizes, etc.


The system simulates increase in supply of industrial facilities through industrial building permit data collected from permit issuing agencies within the study area—typically a Metropolitan Statistical Area (MSA).  The quantified estimate of supply is then compared to our demand projection to determine the future direction of industrial vacancy rate, the area's ability to absorb new industrial buildings, and recommended building sizes derived from the size profile of area industrial tenants.


Survey Data
AGA generally recommends the use of area broker data as a supplement to the statistical model.  Broker data provides a good overview of the industrial market relative to vacancy rate, absorption activity, asking lease rates, etc.  The data is typically summarized by submarket, providing further definition of the site area.


Detailed product recommendations require an audit of site area industrial facilities by experienced analysts at AGA.  Field surveys also provide a more definitive understanding of the site area industrial market based on our audit of all existing facilities, including many facilities excluded from broker surveys.  The field survey can assist developers in the design of their business or industrial parks through detailed analysis of building sizes in the site area along with recommended building features and project amenities to enhance the competitiveness of the project.  We can also collect and quantify information regarding other industrial facilities under construction and planned for development in the site area.


Clients who utilize our services to assist them in the development or purchase of industrial properties include Chevron Land & Development, The Irvine Company, LNR Property Corporation, GE Real Estate, Mission Viejo Company, Catellus Development Corp., Turner Development, Golden State Developers, Lowe Commercial Corporation, Capital Pacific Holdings, Inc., etc.

 

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