GHC Thematic Report: Modern-Day Factory Towns Making Way for Multi-Family Investments
Modern-day factory towns are popping up throughout the old industrial midwest as e-commerce growth surges across the country. Large retailers look for easy road/highway access to large parts of the U.S. population, adequate land or dormant brick and mortar infrastructure to place facilities, and affordability for their employee base. Northeast Ohio checks all of the boxes to build up-and-coming factory towns. The median rent outside of the city centers in Northeast Ohio falls between $900 and $1100 per month, well within the affordable range for an individual making a $15-$25 hourly wage. This affordability is helping drive new developments to the area. At Green Harvest Capital, we are focused on acquiring assets in areas of Northeast Ohio that we believe are on the upswing of an economic renaissance, where we can provide a better product to the tenants, and help improve the community.
The New and Improved “Factory Towns”
“Factory towns”, a new term coined by major e-commerce retailers like Amazon, Walmart, and Chewy, cater to the United States’ road-based economy. Since the Highway Act of 1947, the U.S. transports more goods via roads than through railroads or water. E-commerce companies are searching for locations along interstates to build new warehouses and distribution centers. These distribution centers not only require large amounts of land, but also close proximity to their end customers. Northeast Ohio checks all of the boxes to build up-and-coming factory towns.
Amazon’s second-largest distribution center in the United States is in Akron, Ohio. Located within nine to ten hours of numerous cities, the distribution center provides the ideal location to reach a large number of the company’s U.S. customer base. With each 8,000 square foot Amazon facility providing 1000 to 1500 full-time jobs, these developments are building a symbiotic relationship between the company and the city. This facility is just one example of the value Northeast Ohio provides to companies and the benefits it receives in return.
Warehouses Creating Community?
The average starting wage at an Amazon fulfillment center is now $18 per hour. The median rent outside of the city centers in Northeast Ohio falls between $900 and $1100 per month, well within the affordable range for an individual making a $15-$25 hourly wage. This affordability is helping to drive new developments to the area. Not only would companies have adequate land and a central location, but also a more sustainable workforce that can afford to live in the community. As more companies make the move to build new warehouses in the Northeast Ohio area, it also opens the opportunity for a greater economic boost in the form of shops and dining for the workforce in these cities.
Strategic Investments
In order to receive the benefits of modern-day factory towns, there must be adequate support and resources to help them take shape. With each new warehouse employing a thousand people or more, the need for affordable housing within close proximity to these facilities will continue to increase. Multi-family real estate investments are key to further lifting the working class by providing more affordable living in these areas. At Green Harvest Capital, we are continuously acquiring investments in these strategic locations, helping to break down the barriers to entry for new facilities that will ultimately create greater livability in our communities.