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Industrial Land Use Trends
Anita MorrisonPartners for Economic SolutionsOctober 31, 2013
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Industrial Land Uses Production Bakeries, coffee
roasters, printers, woodworking, custom furniture
Distribution Repair Auto repair Appliance repair
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Industrial Land Uses Contractors Landscapers Home improvement
contractors Retail Countertops, carpets Entertainment Gymnastics Paintball
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The Importance of Industrial Districts
Entrepreneurs and small businesses Arts and arts-related
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The Importance of Industrial Districts
Convenient access to repair and other services
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The Importance of Industrial Districts
Entry-level and vocational jobs
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The Importance of Industrial Districts
Public sector operational needs Tax revenues
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Zoning Issues for Industrial Districts
Market pressure to convert use Speculation raises land values Residential encroachment impedes operations
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Industrial vs. Flex Space
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Industrial Warehouse/
distribution Manufacturing
Flex Office in front Warehouse,
assembly in back
Labs
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Space Trends
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Major declines in Construction pace Absorption pace Occupancy rate
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Industrial Space-Current Conditions Industrial Flex
Total Inventory (Sq. Ft.) 14,306,000 11,701,000
Occupied Space 13,196,000 10,331,000
Percent Occupied 92.0% 87.6%
Annual Absorption
1993-2002 141,000 247,000
2003-2012 -2,000 -6,000
Rent ($/Sq. Ft. NNN) $11.22 $14.14
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Absorption was greatly affected by the Great Recession; now recovering Low occupancy rates relative to healthy rate of
92% to 95%
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Industrial and Flex RentsJurisdiction Industrial Rent Flex Rent
Montgomery County $11.22 $14.61
Prince George’s County $6.60 $9.01
Frederick County $5.72 $11.22
Fairfax County $8.97 $12.89
Arlington County $11.44 $21.90
City of Alexandria $9.75 $13.95
District of Columbia $10.52 $12.21
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Montgomery County rental rates are higher than those of all competitive jurisdictions, except Arlington County
Third Quarter 2013 triple net rents per square foot, excluding utilities, taxes, insurance and maintenance.
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Regional Industrial Trends
Last decade saw a major shift to second-ring suburbs Charles, Frederick, Loudoun, Prince William, Manassas and
Manassas Park Away from DC and first-ring suburbs Montgomery, DC, Prince George’s, Fairfax County, Arlington,
Alexandria, Fairfax City and Falls Church
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Employment Trends
PDR industries under-represented in Montgomery County and regional economies
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Need for Industrial Space
Declining industrial employment does not eliminate the need to preserve industrial land Lower employee densities Shifts among subsectors and businesses Replacement of obsolete space Locational mismatch Shifts of flex space to retail showrooms and office
uses County facility needs
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Large-Lot Single-Family Development2 units/acre
Industrial Land Use Patterns
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Industrial Land Use Trends
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From 1993 to 2012, 144 properties with industrial uses changed to a commercial or residential use 566 acres removed from the industrial inventory Almost one-quarter of all industrial land
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18Industrial Properties Converted to Other Uses 1993‐2012
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Policy Recommendations No need to expand the supply of industrially
zoned land county-wide Important to preserve existing industrial space
in each of the county’s major subareasMaintain well-dispersed “pods” of industrial
land for services to residents, businesses and agenciesMaintain an adequate supply of municipal
support service sites
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Policy Recommendations Resist industrial land rezoning, particularly
down-county sites and sites near other industry Restrict uses to industrial-type operations not
well suited to commercial or employment zones Higher-value uses will push up land values and
push out industrial uses Allow some limited support retail and services
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Policy Recommendations Land within one-half mile of Metro stations
should be reserved for higher-density uses Quarry land can be transitioned to other more
intensive uses without negative economic impacts due to limited need for land zoned for heavy industry
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Key Zoning Area Issues Brookville Road area in Lyttonsville Howard Avenue in Kensington Parklawn/Twinbrook Critical to providing convenient access for
customers
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Protections in the Zoning Rewrite Only educational uses are trade, artistic and
technical schools Retail/service uses Building and food service supply Home design and furnishings Computer programming and software sales Wholesale trade to industrial and commercial
users No hotels Excludes live/work in Industrial Light,
Industrial Moderate and Industrial Heavy zones
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Protections in the Zoning Rewrite Limits ancillary retail/service, office and
restaurant use to 35 percent of the mapped FAR Allows for hybrid operations (e.g., office,
warehouse, sales and production) Provides on-site amenities for industrial users and
a better mixed-use environment Allows large recreational and entertainment
facilities up to 1,000 persons
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Buffering Provisions 30- to 50-foot landscaped buffer between
industrial and residential uses Tough on smaller sites Zoning does allow for alternative compliance
methods
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Policy Recommendations Any rezonings should consider impacts on
existing businesses Rezone close in time to anticipated development
to avoid speculation 50-foot height limit is compatible with needs of
modern warehousing FARs of 1.0 to 2.5 greatly exceed what is likely to
be developed
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Conclusion County is well served with industrial land given
the nature of the local economy Good stewardship of the county’s resources
demands an optimal mix of land and development Recognize the role played by industrial districts Protect remaining industrial land in developed
portions of the county
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