The The Bowling Green/Warren County area has seen quite a slowdown in industrial development recently, according to Alex Nottmeier, commercial real estate broker and developer with Neal Turner Realty. "This slowdown can be attributed to several factors. The most predominant is our current low unemployment rate," he says. Bowling Green ended the year 2000 with an unemployment rate of approximately 2.8 percent for Warren County, which has made it difficult to accommodate the labor needs of larger prospective industries.

"With the low unemployment rate also comes a decrease in state incentives, especially KREDA (Kentucky Rural Economic Development Act)," says Nottmeier. This particular incentive, he adds, was taken away from Warren County approximately 5 years ago once its unemployment rate became more in line with the national average. Bowling Green has begun 2001 with layoffs. These layoffs should balance the area' unemployment rate and decrease the concerns regarding the labor market.

"Another factor that has played into our slowing industrial growth has been our limited availability of developed and marketable industrial land," says Nottmeier. To overcome this concern, Warren County is planning to acquire and develop between 2,000 and 4,000 acres of land for a state-of-the-art Kentucky TriModal Transpark, a large high-tech business/industrial park that will provide three modes of transportation: air, rail and interstate.

The Kentucky TriModal Transpark will be the most significant industrial development in Warren County for years to come, Nottmeier notes. Bowling Green is located within 600 miles of 70 percent of the U.S. population, therefore distribution is key. Bowling Green has a parkway system stretching East to West, CSX rail and Interstate 65, which stretches from Chicago to Mobile, Ala. "With the Kentucky TriModal Transpark taking advantage of rail, air and highway, it should serve as a central hub for distribution in south central Kentucky," he adds. "Bowling Green should be able to compete with larger cities once the Kentucky TriModal Transpark becomes a reality."

The last major factor that has played into Bowling Green' slowing industrial growth has been its selective recruiting of prime industrial prospects that offer high-paying jobs. Though some believe this is a great long-term strategy, Bowling Green' growth has been limited due to the choices of quality over quantity.

"With all of this said, there has been minimal speculation by developers of any kind in the industrial real estate market for Bowling Green," says Nottmeier. "If there is any trend in our market, it is smaller pre-engineered steel buildings ranging from 5,000 to 9,000 square feet offering overhead drive in door, dock door, minimal office space and 20-foot+ ceiling heights."

All Corvettes are now manufactured in Bowling Green, and Nottmeier says to look for continued growth in the automotive sector. Bowling Green is located in the "automotive alley," which stretches from Indiana to Tennessee. GM announced last year that it will begin manufacturing a new Cadillac convertible at the GM Corvette plant next year, and Bowling Green will continue to cater to automotive suppliers and manufacturers. Other automotive industries located in Bowling Green include Holley, American Sun Roof Company, Trace Die Cast and Hayes Lemmerz International.

The Downtown Redevelopment Authority (DRA) has taken a proactive approach in order to recruit industry and retail to the downtown area. The DRA recently approved a $250,000 master plan to help assist in creating an overlay for the future growth of industry, retail and office. With grants available, a continued presence of industry will be the norm in the downtown area.

Due to a heavy concentration in distribution, the majority of industrial development is continuing to take place in close proximity to I-65 and the William Natcher Parkway. Distribution industries include General Motors, Weyerhaeuser, Polo.com, Stupp Bridge Co., RC Components and Southern Foods. The South Central Kentucky Industrial Park, which is approximately 1 mile from the William Natcher Parkway, is the desired location for many of the larger industrial users with needs exceeding 100,000 square feet.

According to Nottmeier, the majority of industrial properties in Bowling Green are created by local developers. "We have not seen an increase of outside industrial developers entering the Bowling Green market," he explains. "The Industrial Development Authority (Chamber of Commerce) has been the largest developer of Industrial Land." Other developers consist of Scott and Murphy, Neal Turner Realty and Franklin Berry Jr., property owner of approximately 100 acres adjacent to the South Central Kentucky Industrial Park.

Bowling Green has had a number of significant expansions and signed leases recently. Eagle Industries, which manufactures oak furniture, has acquired many properties in the downtown area. Also, Desa International has been expanding their presence in the Bowling Green area. Trace Die Cast has also acquired adjacent properties in the North Industrial Park as they see their needs grow.

As for recently signed leases, a logistics company handling automotive parts for the new Cadillac Convertible has just leased 150,000 square feet to be used for distribution and light assembly. Within the last 12 months, Polo.com has occupied a 250,000-square-foot distribution center to handle distribution of online orders. Also within the last year, AFNI has opened an approximately 25,000-square-foot in-coming call center. Additional recent transactions include a 300,000-square foot-facility for Longview Fiber to be used for manufacturing and distribution of corrugated products and a 105,000-square-foot facility for Holley to be used for distribution.

Vacancy rates have not been tracked in the Bowling Green market regarding industrial space. There is approximately 500,000 square feet of vacant industrial buildings in Bowling Green at this time. Rental rates range from $2.50 to $3 per square foot, triple net for larger industrial space.

One current trend is a lack of supply in industrial buildings ranging in size from 20,000 to 100,000 square feet, Nottmeier says, adding that there are three 150,000-square-foot buildings available. With Fruit of the Loom in bankruptcy, investors and developers ponder the market impact of the company' abundant industrial supply. A local industry, Houchens Grocery, is in the process of acquiring one of Fruit of the Loom' buildings in the downtown area and will use the building for distribution.

"We have also seen an increase of supply in available garment manufacturing buildings and tobacco warehouses as these buildings become obsolete," says Nottmeier. "The low ceiling heights of the garment manufacturing buildings and the unreliable construction of the tobacco warehouses have made these properties challenging to sell and lease."

Bowling Green will continue to be a central hub in south central Kentucky for retail, distribution, corporate headquarters, education and medical services due to it' progressive leadership, attractive universities and technological schools and thriving infrastructure.

Alex Nottmeier, CCIM, is a commercial real estate broker and developer with Neal Turner Realty.


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