When the time comes for you as a business owner to expand or relocate your operations, choosing the right site may be the most important decision you make. Whether you are leasing a space or purchasing a building, selecting a site that maximizes your business’s potential is an important decision. It is a decision that may be extremely difficult and costly to reverse.
Site selection is a multi-step process best undertaken with the assistance of an experienced professional. A dedicated tenant-representative puts your interests ahead of all others, including their own. Tenant-rep brokers serve strictly as the business owner’s advocate and can identify off-market opportunities, explain the pros and cons of complex lease structures, and negotiate favorable terms. For the tenant-rep broker to help you secure the facility that gives your business the best chance to thrive, they need a clear picture of your business’s specific needs.
Here are the main operational areas that require thorough due diligence:
Physical Requirements of the Business
Business owners need to provide their tenant rep with specific requirements of their business operations. Important items to communicate are an accurate employee headcount, car and truck parking, square footage for office and warehouse space, warehouse clear ceiling heights, loading door access, and power requirements. For businesses using heavy machinery, floor load capacity needs to be conveyed. Additionally, any anticipated near-term growth that may require expansion or relocation should be communicated.
Access to power and utilities has moved to the top of the site selection list. Upgrading utilities in Southern California can take 6 to 12 months and require massive upfront capital. It is vital to advise your tenant rep of your business’s operational power requirements upfront to prevent viewing sites with inadequate power supply or incurring unnecessary expenses.
Location
Transport and logistics often make up the largest portion of operational expenses. Locations in close proximity to major highways, railways, ports, and airports keep transportation costs low. This is especially important now when fuel costs have skyrocketed. Proximity to key freight corridors (I-10, I-15, I-605, I-710, CA-60), major ports (Port of Los Angeles, Long Beach, Port of San Diego), and cargo airports (LAX, Ontario International) is essential. Warehouse/distribution businesses must also weigh the relative costs of proximity to their target markets versus facility rent. For manufacturers, this means proximity to primary materials suppliers.
Access to Labor
A local labor pool within driving distance, or with access to convenient public transit, is vital. This is especially true in an area with low unemployment. That labor force must also have a skill set that is commensurate with your business operations. When evaluating labor, businesses must consider the population’s technical skill level, local prevailing wages, and competition from neighboring industrial employers. Choosing a site without analyzing local talent access risks staffing shortages.
Regulatory and Political Environment
It is important to understand the zoning in the municipality where the facility will be located when reviewing potential sites for your business. Before purchasing a building or signing a lease, review local building codes, environmental laws, waste disposal rules, and zoning permissions. California has a number of regulations relating to warehouse and manufacturing facilities in addition to the local zoning ordinances that need to be considered.
Rule 2305: The WAIRE Program is an indirect source rule that regulates warehouse facilities to reduce air pollution from the goods movement industry.
AB 98 & SB 415: AB 98, passed in 2024 with an effective implementation date of January 1, 2026, set new warehouse regulations that apply statewide. California SB 415, passed in 2025, refined AB 98 rules. These laws include regulations on buffer zones near homes and schools, anti-idling signs, truck routing plans, and strict energy efficiency standards. AIR CRE provided a more in-depth look at AB 98 and the clarifying SB 415 amendment.
Tax Incentives
State and local tax credits can significantly offset the cost of expanding or relocating an industrial business by directly reducing its overall tax liability. The California Competes Tax Credit (CCTC), for example, is an income tax credit available to businesses moving to or expanding in California. Over $100 million of credits are awarded annually through a competitive application process that weighs job creation, capital investment, and overall economic impact.
Common Mistakes
The following common mistakes that businesses make in selecting a warehouse location, adapted from a recent Link Logistics article, can be applied to any industrial site selection process:
Optimizing Only for Rent: A cheaper per-square-foot rate in a secondary market often gets wiped out by higher freight and trucking costs. What actually matters is the total cost of operating from that location, not just the lease rate.
Underestimating Power Requirements: Many existing properties were built with a power infrastructure that simply can’t handle the current requirements of modern operations that require heavy manufacturing equipment, automation and climate control.
Not Considering Labor Requirements Upfront: Businesses often spend significant time analyzing rent and transportation costs but treat staffing as a given — only to find themselves short-handed once the facility is up and running.
Only Planning for Current Needs: Selecting the tightest footprint that works for today’s operation can backfire and force an expensive move down the road if the company grows or hits a seasonal surge in volume.
Not Evaluating the Submarket: Labor availability, power capacity, traffic congestion, and zoning rules can differ sharply from one submarket to the next, even within the same broader region — so a strong overall market doesn’t guarantee the specific site will work.
Ignoring the Infill-vs-Greenfield Tradeoff: Cheaper land on the outskirts of a metro can come with a hidden cost: longer commute times for employees and greater distance from customers.
If you’re interested in relocating or purchasing an asset for your warehouse or manufacturing business, contact one of Voit Real Estate Services’ trusted commercial real estate advisors.