Industrial shell buildings -- those with empty interiors that can be quickly tailored to a company's specific need -- were touted Tuesday as a means to help bridge the gap between Northwest Indiana and the rest of the Chicagoland area in the industrial marketplace.
"Shell buildings do work. They do bring in tenants," Michael Micka, vice president of development for Holladay Properties, told business leaders and elected officials attending a panel discussion on building to meet industrial real estate needs across Northwest Indiana.
The discussion was sponsored by the Northwest Indiana Forum and held at the Indiana Welcome Center in Hammond.
"Time kills a deal. If you say it'll take six months (for a company to move in to a building) they'll go somewhere else," said Micka, who added Holladay's Ameriplex industrial complex in Portage is home to 50 businesses and has a 10 percent vacancy rate.
According to information provided by the Forum, Northwest Indiana lacks the new buildings that commercial and industrial users want, which is causing the area to fall behind in new business activity.
Kelly Disser, executive vice president of NAI Hiffman, an Oakbrook Terrace, Ill., commercial real estate firm, said there are 437 industrial buildings in Northwest Indiana, with a vacancy rate of 8 percent.
"When you get down to a vacancy rate that low there's not enough to choose from. It creates a need to grow and challenges for people who want to come here," Disser said.
Of 677 business investments in the Chicago metro area in 2013, Northwest Indiana received only 16, the Forum stated. Illinois suburbs received 265.
Dan Zuerner, vice president of business development for Garmong Construction Services in Terre Haute, said 60 percent of industrial companies demand existing buildings.
Zuerner said shell buildings can reduce project development time by as much as 75 percent, provide a glimpse of the finished product, create the flexibility needed to attract projects of varying size, reduce the number of competitors and are cheaper and faster than if an existing facility had to be reworked.
He also noted that they can provide financing alternatives through public/private partnerships.
Zuerner said he and Micka could bring private dollars to the table, but added, "If there's no tax abatement, I can't sell it."