As manufacturing boosts commercial real estate, Placemakers are taking note

Denver’s most illustrious Maker defies description. She’s a real-estate developer by trade, though the moniker understates the outcomes of her work. After all, how many developers have a hotel named after them?

No, Dana Crawford is a placemaker. Crawford’s projects – her places – are often a brick-and-mortar continuum: they remind us of who lived and worked here before, of who made it possible to build anew at the same time they embrace the future.

I met Dana a decade ago. Our connection also involved a place, Salina, Kansas, from where both of us hail, roughly. Reconnecting after a several years, our interests may again align, this time around the changing face of urban development. In a recent conversation, she mentioned how she believes light industry, manufacturing, is poised to be an integral component in modern, mixed-use development. I’ll leave Dana’s projects to speak for her, which I’m certain she prefers anyway, but the sentiment from so esteemed a placemaker confirms a trend we’ve written about previously.

The upshot is that a broad-based manufacturing revival is providing commercial real-estate a boost. Of course much of the excitement in today’s industrial real estate sector involves big-box space. A boom in e-commerce and the related need for warehousing space is a catalyst. But so is the resurgent manufacturing sector, generally. Vacancy rates for Class A space in America’s major industrial centers are dropping. A CBRE market analysis sums it up. “The nation’s factories are humming again, and industrial capacity utilization rates are back to historical averages; firms will soon need to start investing in new facilities as demand for their products increases in the expanding economy.”

The Urban Land Institute’s 2014 Emerging Trends in Real Estate forecast a similar push. “Manufacturing is coming back to the U.S., and it’s coming back faster than we thought. Back in 2011, no one thought we would see anything until 2015. Now, we are seeing dozens of companies moving back to the U.S. because the economics are shifting,” ULI’s report says, referencing the reshoring trend underway in U.S. industry that’s driving demand for commercial space.

But it’s likely that manufacturing will build differently in the future, and the demand for space will manifest accordingly. In real estate, the industrial renaissance continues to be largely defined by large increments of square feet like warehouse space, but observers like Denver’s Richard Kadzis believe that “economies of scale” are changing. “There will be a re-emergence of manufacturing in the U.S. with smaller regional facilities,” he notes.

Colorado’s manufacturing sector will certainly grow in this manner. As much as economic developers must focus on big companies, and ‘wins’, like Tesla, manufacturing growth here will also sprout from the state’s vibrant small business community, leveraging leadership in food and beverage, bioscience and medical, aerospace, consumer goods and contract manufacturing across all industrial sectors as companies seek new tech shops, materials suppliers, and labor to reshore operations.

The trend should inspire today’s placemakers. Mixed-use space that include light industry add interest and are financially more sound. They add fabric and flavor – beer and spirits, food and wine, cycles and clothing – to new our new urban settings. Imagine a city center development in Colorado without a craft brewery. They’re also tax and job generators, not simply cost centers for city services.

Moreover, any move to assimilate making and manufacturing back into our cultural fabric is a plus. We derive so much from building around our work. The products we make tend to be higher quality, at the same time we shorten supply chains, support local producers and become more efficient energy consumers. Wages from manufacturing are relatively high. We’re building careers, not just creating jobs. Residents prosper.

As rock-star placemakers like Dana Crawford envision compelling new places incorporating industry, advocates of local manufacturing will continue to push for the American-made renaissance. We’ll meet in the compelling spaces of the future.

Everybody wins.