Finding the Ideal Facility – Part 1 – Picking the Location
When trying to create the perfect facility there are many different things to consider – site location, site layout, building layout, lighting, security, etc. There also is no such thing as a “universally perfect” facility. Each company will have a slightly different priority list and even within the same company you will find differences at each different location. As an example, a facility in Miami will have different priorities compared to one in Minneapolis. The Miami location will need to worry about hurricane proofing while Minneapolis must worry about things like snow load.
In general, we have several common items that need to be considered:
- Site location and size
- Building construction type and layout
- Required infrastructure
- Parking for employee vehicles, tractors and trailers
- Environmental considerations
- Political/social considerations
This week we will focus on the site location and size.
When considering the ideal site, the following should come into your planning process:
- Size of the lot.
- Shape of the lot
- Proximity to an Interstate
- Proximity to your customer base
- Commuting distance for your employees
Regarding size, you will need to calculate how much space that the fleet to be domiciled at that location requires, including space to maneuver vehicles without causing any damages. Assume 80 feet for a tractor trailer combination. That means you need a minimum of 133 feet (80 feet + 53 feet), and more likely 150 feet between rows of trailers to allow for enough space to pull trailers in and out of the rows. Additionally, you will need about 10 feet in width for every trailer. As an example, if you have 90 trailers and the lot is 350 feet wide, you will need to have enough room for 3 rows of 30 trailers (allowing enough space for a laneway at both ends). You will then need approximately 450 feet in length to fit the 90 trailers. This is before we find space to park the tractors, put up the building, etc.
Tractor parking is a little more of an art as highway tractors can be anywhere from 20 to 29 feet long depending on the wheelbase. Day cabs will run about 5-6 feet shorter. For tractor parking in a tight yard, consider using angle parking as it will shorten the width needed compared to straight on.
There are a few other major considerations with a site:
- Being close to your customers as well as an Interstate (or other major highway) means that you will be minimizing unpaid miles – this is a cost that needs to be considered when choosing a site as it is effectively a fixed overhead charge that will eat into your profit on almost every trip.
- The physical shape and landscape of the property. Ideally the lot will be either square or rectangular. This will reduce the amount of wasted space that reduces parking capacity.
- What is the natural drainage of the lot? Will it need significant ground preparation and a catch basin system?
- Are there any waterways or aquifers in the area? Those could result in restrictions put on your ability to refuel in the yard as well as the storage of items like used oil or anti freeze. You may need to construct a berm for any spill containment.
- Zoning – ideally any site you select will already have the proper zoning from the municipality. Having to apply for a variance or zoning change will result in additional time and expenses as well as injecting some uncertainty into the project. The municipality may reject your application, especially if it is a jurisdiction that has already shown hostility to our industry with things like parking restrictions or traffic bylaws that require trucks to reroute.
- What is the planned use for surrounding properties? Will those uses have a potential impact on your planned operation?
- If you think that you may need to expand in the future, gain an option on an adjacent lot. Otherwise you could find yourself land locked in the future.
- What is the tax structure in that municipality? Pay attention not only to the rate but how the value will be calculated. It is not uncommon for nearby jurisdictions to have vastly different property taxes on similar sized and priced lots.
- What services are currently available for the property and what will be the buyer’s responsibility to provision? Pay attention to things like natural gas and fibre optic availability as the cost to have these brought to your property can be high. Without some form of reliable high-speed internet, you could find your staff unable to work effectively. What sort of electrical service can you get, and will it be enough to power your planned operations?
- Were there any previous uses that may require environmental remediation? Remediation can be very costly. Take this into account if buying a property that has already been used as a terminal.
- What sort of soil does the lot have? The soil composition may impact the footings required for your desired building. How stable it is may impact the amount of earthworks are needed before you can use the property. The soil can also impact any environmental concerns (example – a fuel tank leak in sandy soil may go down several feet until it hits bedrock or clay. It may then run for hundreds of feet underground. If you need to do a remediation this could easily cost hundreds of thousands of dollars).
- Surrounding neighbours – will your drivers be coming and going at all hours or will they mostly be operating during daytime hours?
- What sort of surface the yard has have an impact here. If you have a dirt or gravel parking area you may run into a dust issue, resulting in the need for periodic applications of some sort of dust abatement product.
- There needs to be adequate parking for both your staff and any visitors.
- The building that houses the terminal should have enough room for future expansion without causing onsite traffic flow problems.
- Are there any location specific needs, such as where to pile snow in northern states? If you have a facility in places like Buffalo you will either need to leave aside space to pile snow, have some sort of melting system or have someone in place to truck it away.
- In northern states, there may be a need for plugs to operate block heaters in the winter months.
This list in not exhaustive and may differ depending on the location you are searching in. The take away is you need to do your homework before you start looking. Spend the time up front to know what you are realistically looking for will allow you to have a list that you can use to compare different options against each other. If you are not sure of what you need, enlist the help of an expert. Many commercial real estate brokers will have people on staff that can give you the necessary guidance.
A final point – not all real estate brokers are equal. Don’t just go with the person who helped you buy or sell your house. A residential specialist is unlikely to have the skill sets or supporting services to help you through the maze of regulations that you will face in the commercial/industrial marketplace. Go with a commercial real estate agent from the start as they will be knowledgeable about things like zoning or acceptable uses as well as knowing the questions to ask and have the resources to let you get things right the first time.
Next week we will look at how to design your ideal terminal building.