Light Industrial Demand Analysis




The demand for light industrial land is a function of several variables that are inherently different from the variables that affect market demand for residential or commercial/retail uses. Commercial/retail is driven primarily by demographics and “psycho-demographics” (purchasing habits by demographic). Industrial markets, on the other hand, are linked to cost factors, such as land, labor, capital, and access to supporting industry (i.e., goods and services sometimes considered “clustering” or sometimes parts of the supply-chain).


Further complicating an analysis of market demand is the variation in types of light-industrial use. In a report Guide to Classifying Industrial Property, the Urban Land Institute groups the types into three primary categories of industrial use, 1) manufacturing and freight buildings, 2) warehouse distribution and flex space and 3) multi-tenant buildings to reflect three main types of owners. ULI classifies these uses in the three categories to account for research showing corresponding levels of risk by type of owner, “there are differences in investment performance for each industrial category” (ULI, 109). The owners of manufacturing and freight buildings commonly own their facilities and generally are less likely to change a location. Institutional investors own warehouse distribution, which are the most “commodity-like,” and flex space, which offers lower rents than commercial or office buildings. The third category includes smaller buildings that are owned by private investors and are multi-tenant buildings; these multi-tenant buildings are generally known as ideal locations for small contractors. According to ULI, of all the types, the multi-tenant is the most difficult to categorize and to track data about because there is little historical investment or market data (ULI, 10).


A closer look at an increasingly important user of light-industrial land, the biotech industry, shows an industry average space consumption of 500SF/employee, in contrast to office space average of 250SF/employee. This suggests that, while employment in some sectors of manufacturing has declined, one user of light-industrial land, manufacturing, typically requires more square footage than with average office-commercial development, and more land.   


Land Use Designation in the Comprehensive Plan


The comprehensive plan allows for light-industrial uses under “Industrial Service.” Uses allowed within this designation include warehousing, light industry, research, heavy industrial uses, as well as uses allowed under Office Service. Commercial uses are allowed as a secondary use. Residential uses may be appropriate in the Industrial Service designation if such uses are compatible with the nearby and adjacent Industrial Service uses.  Industrial Service designation requires appropriate site size, 5+ acres, arterial road accessibility, water and/or sewer availability, and compatibility with adjacent uses.  In addition to the general standards, the following standards are recommended to guide industrial development. These standards apply to light and heavy industrial uses, warehousing, “flex” type of uses, and research/development/technology centers having characteristics more in keeping with industrial uses.


  1. Industrial zoning districts should be permitted only in designated Communities and Urban area.
  2. While single-use industrial sites must be accommodated, re-zonings which propose multiple sites served by common access points should be encouraged.
  3. Mixtures of residential, commercial and industrial uses may be appropriate where objectionable aspects can be addressed through a combination of performance standards.
  4. Industrial uses should locate in areas where public utilities and facilities are adequate to such uses.
  5. Rezoning to industrial designations of 20 acres or more should be accomplished under a planned approach accompanied by a traffic analysis.


Land Zoned Light Industrial


Land zoned light industrial is expected to be more affordable land, generally speaking, with use restrictions that diminish its utility when compared to land used for commercial-retail or housing. In Albemarle County, light industrial zoning uses are generally consistent with ULI’s definitions and can be divided into those which are by-right and those which require a special use permit.


The County’s Zoning Ordinance Section 27 Light Industrial, contains a lengthy list of by right uses. An abbreviated list includes 1) compounding drugs and biological products, 2) manufacturing, 3) major publishing, 4) research and development, 5) technical or scientific education facilities, 6) assembly, 7) contractor’s office and storage yard, 8) business and professional office buildings, and 9) warehousing. 


With a special use permit, laboratories, airports, assembly of modular building units, moving businesses, towing and storage, supporting commercial uses, and indoor athletic facilities are all allowed in light industrial districts.


An additional requirement for establishment of an LI district is a minimum area of five (5) acres. Any applicant seeking to establish an LI district would be prohibited from doing so on a parcel of less than 5 acres, unless that parcel adjoins an existing LI district.


A GDS analysis of parcel data shows a comparison of properties that are both designated Industrial Service in the Comprehensive Plan and zoned for light industrial. Parcels that are both designated and zoned for industrial use are ready for an industrial owner or tenant. Parcels with only an Industrial Service designation, but not LI zoning, are more likely to be subject to speculation for other zoning districts, such as residential. Per the 5-acre minimum requirement for rezoning, some parcels cannot be rezoned to match the Comprehensive Plan designation. See the table below.


Table 1 - Albemarle County Acreage for Light Industry Activity


Total IS

Total LI

Both IS & LI

Vacant IS

Vacant LI

Vacant IS & LI

Places 29














Remaining County







Total County







  1. IS = Industrial Service in the Comprehensive Plan, LI = Light industrial zoning
  2. Acreage totals are based on GIS-mapped polygons
  3. Any acres in the 100-year flood plain covered were subtracted out and are reflected in these totals
  4. “Undeveloped” refers to building improvements values listed in CAMA greater than or equal to zero and less than or equal to $20,000
  5. End of year 2005 CAMA data was used for this analysis, compiled by GDS


Current Ownership & Uses


In contrast to the supply of designated and zoned industrial land, a review of LI ownership is helpful in characterizing current parcel sizes. Staff in the County’s Geographic Data Systems (GDS) division identified current owners of all properties zoned LI in Albemarle County. See Attachment 1, Industrial Land Ownership and Sales. Taking out the UVA Research Park shows an average parcel size of four (4) acres and a median parcel size of two (2) acres, generally too small for economical development.  Of the sales dates identified the average year sold was 1997, excluding the place holder date 1900.


Over time new LI work space has become available as new buildings have built out in the UVA research parks and as existing buildings have been vacated and adapted for reuse. The table below shows an overview of new or newly adapted space in recent years.


Table 2 - New and Adapted LI building space in Albemarle County

Place Name

Building Project (new construction)


University of Virginia Research Park formerly known as UVA Research Park at North Fork

Town Center One (70,563 SF)

Town Center Two (83,555 SF)

PRA (82,577 SF)

Biotage (52,000 SF)

MicroAire Surgical Instruments (46,000 SF)

Motion Control (25,000 SF)

Emerging Technology Center One (41,778 SF)


Fontaine Research Park

R&D, UVA Health Services (495,000 SF)


Avon Extended


Bio-tech and local contractor services



Defense contractors, R&D (500,000SF)

Music Today


Adapted from ConAgra


Table 3 below indicates an approximation of acreage actively marketed in Albemarle County for new tenants and/or buyers. This data is provided by local commercial realtors. Several locations have environmental hazards; one is constrained from expanding by its location in the rural area. The University parks require tenants to maintain a research relationship. Avionics Specialties and Badger both require building adaptation, Avionics also requires removal of asbestos. The last, Comdial, is leasing as a multi-tenant building. Avon Court and the property near Sunbelt are currently under development, in the site planning stages.


Table 3 - Available, “Marketable” Space for Supporting Local Services and Major Industry

Place Name



Comp Plan

Restrictions, notes

Avon Court





North Fork




Research affiliation





Research affiliation

Earlysville Business Park



Rural Area

In the rural area

Acme Visible Records




Environmental contamination, railroad crossing

Avionics Specialties




Environmental hazards






Below Sunbelt Rentals, Rt. 29








District, CT-4


Grand Piano Warehouse



Community Service

Environmental/Landfill hazards





None, multi-tenant office uses

Source: County View


Another demand measure is the office market, since office is permitted in LI-zoned property. A recent study published by the Appraisal Group indicated that the combined market of Charlottesville and Albemarle County had an overall office-rental vacancy rate of 6.6%. To compare to national average, the Appraisal Group cites Cushman and Wakefield’s reported a national average for the first quarter of 2007 of 9.9% for central business districts and 14.3% for suburban office markets. Broken into quadrants, the Appraisal Group reported office-rental vacancy rate of 9.8% for the northern area (roughly corresponding to Places 29) and a market share of 33.8%


Table 4 - Sample Size Totals For Charlottesville-Albemarle Office Space


Total Area (SF)

Vacant Area (SF)

Vacancy Rate





















Source: The Appraisal Group, Inc., “Office Market Review” 2007


Perhaps the best measure of demand for light industrial land is available by documenting major businesses that have been turned away, due to lack of space, or a lack of a relationship with the University research programs. Field data indicates the companies listed below have been turned away since 2004. Some local companies are looking and finding no expansion options, and for this reason, these companies are considering moving out of the County. The list below was compiled from the University Real Estate Foundation, the Thomas Jefferson Partnership for Economic Development, and from Hasbrouck Realty. The average size parcel request is in the range of 9 to 10 acres. See the list below for space requests.


Table 5 - Space Requests, 2004 to 2009

·         NL Novalink, 100,000 SF. on 10 acres, 2006 (North Fork prospect)

·         Harmon Becker, 100,000 SF on 12 acres, 2004 (North Fork prospect)

·         Christi's looking for 80,000 SF of warehouse on 3 acres, 35 foot ceiling, summer of 2007

·         Vest Excavating looking for 30 acres, recycling wood, summer 2007

·         Carter Machinery looking for 3 acres with visibility, summer 2007

·         Hertz Machinery looking for 3 Ares with visibility, summer 2007

·         Local company, looking for 20 acres, 2008

·         Local biotech, looking for 3 acres, in 2009

·         Second local biotech, looking for 4 acres in 2008


Anecdotal examples such as these suggest that the availability of LI-zoned land is an issue in Albemarle County, but there is a second issue that the County needs to recognize.  This second issue involves the likely LI-zoned land price differentials that exist between Albemarle and the surrounding counties in our region.  LI-zoned land prices likely are higher in Albemarle than in the outlying counties.  If the magnitude of these price differentials is large, the County might have a difficult time retaining or attracting LI businesses.  A critical issue facing the County, then, involves whether or not Albemarle could increase the supply of LI-zoned land to the point at which the price differentials either would disappear or at least would diminish enough to cease being a deterrent to the retention or location of LI businesses.  Clearly, this issue merits further research.  




The second factor in determining location for light industrial property is labor. Virginia enjoys a favorable business climate as a right-to-work state.  Among the local labor force there have been some losses and gains in the sectors of industry that typically occupy light-industrial space: manufacturing, bio-tech, office, and construction. The tables and data below provide a measure of recent trends in labor.



Table 6 - Manufacturing Employment Losses


Peak Employment

Departure Date







Acme Visible Records









Avionics Specialties



Cooper Industries (Murray)



* These companies left prior to June, 2005

** This data is unavailable

Source: County phone surveys, VEC data


The Virginia Employment Commission (VEC) tracks employment by classification, using the North American Industrial Classification (NAIC) two-digit code. The VEC industry sector called “Professional and Technical Services” shows fairly constant employment in Albemarle County and captures some of the bio-tech jobs.  At the four-digit level, bio-tech is showing strong positive employment growth. The following average annual growth rates were derived from VEC’s 1990 and 2005 employment data:


·        Professional and Technical Services employment averages 10.8 % per year, for a total of 2,252 jobs in 2005

·        Bio-tech employment growth by 4-digit NAICS code is averaging 16% per year among the 23 companies identified, for a total of 250 jobs in 2005)

·        Fourth largest segment of the County employment base at 6.8% or 3,080 jobs, local contractor employment growth is averaging 2.5% per year.  This sector grew considerably during the housing boom of recent years; employment growth in this sector likely will slow, or the sector might even experience actual declines in employment, in the next couple of years.

·        Transportation and warehousing employment is only 1% percent of the total County employment base at 555 jobs, growing a modest rate of 3.5% per year


Access to Supporting Industry


Airport, rail, highways, and access to raw materials can be critical to a location decision. But also, the overall costs of business can be lowered if there is a sufficient base of supporting industry, services providers, and contractors. A close examination of zoning code violations in the Rural Area reveals some trends for supporting industry to start as home-based businesses in the Rural Area and then grow to a point of creating nuisance for their neighbors. For the last two years, a tally by type of business shows 9 auto repair and tow services; 10 painting, plumbing and contracting services; and 5 miscellaneous services (junk yard, salvage). This provides some indication of locally supporting industry that would be better located in land designated and zoned for light industrial activity.  It should be pointed out that a few of the types of small businesses mentioned in this paragraph might not be willing and able to pay the costs of making a transition to a “formal” LI location.  Anecdotal information from several local service companies recently leaving the area suggests, however, a shortage of land for companies that support homeowners and commercial businesses alike. 




Similar to national trends, there are three emerging trends among local users of light industrial land:


1)      Some manufacturing and service users have recently moved out of Albemarle County

2)      The high-tech and bio-tech sector are showing strong growth in our region

3)      Users of multi-tenant buildings (contractors, maintenance and repair services) and warehouse space needs are growing to meet local demand for services and goods


The demand for light industrial is highly dependent on factors affecting operating costs: land, labor and capital, as well as access to customers and support services.  One of the key factors, land, is clearly in short supply given that land both designated Industrial Service and zoned light-industrial only accounts for 121 acres of the County’s build-able, vacant land. Generally, LI users will choose to locate where product is ready, available, and sufficiently plentiful for an affordable supply.  Again, the question facing the County involves the extent to which Albemarle can increase the supply of land designated and zoned LI to the point where this type of acreage becomes affordable relative to comparable acreage nearby counties.



Go to next attachment

Return to exec summary