The Real Estate Multiplier By Joe Edge
The Real Estate Multiplier
By Joe Edge, President and Broker
For most communities, the manufacturing and industrial market is vital for economic potential. While Augusta benefits from forces like Fort Gordon and the medical community, regional manufacturing and industrial partners remain a key driver in the sustainability and growth of our job market. As real estate professionals we work with economic developers to bring jobs to our community, but we understand that not all jobs are created equal. There are certain types of jobs that have a multiplier effect and for manufacturing and industrial jobs, in particular, this effect is fundamental to sustained growth. These jobs have a greater impact and foster more growth than jobs in retail or offices and the reason is simple. Manufacturing stimulates industries that either directly support the mission of the manufacturer or are ancillary to the market. Manufacturers often require regional support and the jobs that are created in support of the manufacturer spur more industrial and office jobs. The multiplier effect continues to compound as the need for services, including retail like restaurants and shopping, grow. Compounding the growth even further, manufacturing job growth results in new demand for housing, boosting new home construction.
In any real estate market, job growth is what drives sales. As base employment levels increase, the need for office space increases. As more support services are needed, warehouse, office and retail growth occurs. But in the end, you can trace it all back to manufacturing job growth. Retail, which is what everyone wants and is often the most visible, is really the final phase in economic development. All retailers base their decision to move to an area largely on demographics which include population density, income levels, housing values, spending habits, and potential job growth. Retail growth at its core relies on industrial jobs.
The Greater Augusta area is seeing a real estate boom related to the growth at Fort Gordon and, while this is not manufacturing growth, it can certainly be considered as base job growth. It is unclear how much this will affect other job growth and retail development because it has a completely different kind of multiplier, but it certainly has had a tremendous impact.
As a community, if we want to see population growth as well as retail growth we need to understand that this all starts with base job growth through manufacturing. This is why our regional economic development authorities are tasked with bringing jobs to the area and commercial real estate brokers play a significant role in making that happen. Sherman & Hemstreet Real Estate Co. just announced the sale of the 650,000 sqft former Quadgraphics building in Columbia County, an industrial site that has huge potential for our region. We are proud to have been a part of that transaction and we are now marketing the building to potential users. At Sherman & Hemstreet we are excited to be a part of much of the new job growth in our community and it is our hope that the jobs we bring to the area will have a great multiplier effect and result in more jobs and growth in all real estate property types.
Joe Edge, CCIM, SIOR
(706) 722-8334 ext 206
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