Tennessee Drives Development

The Volunteer State seems to have hit the right note for the automotive industry. Since October 2001, Tennessee has welcomed new investments from seven automotive parts manufacturers.
        "Tennessee is a great location for automotive suppliers -- it just makes sense," says Mike Cherry Sr., president and CEO for TKA Plastics, a firm that produces a variety of plastic parts for General Motors, Ford, Saturn and others. He and other suppliers to the industry find costs in Tennessee very appealing.
        "Tennessee offers a very pro-business climate, with reasonable utility rates and transportation costs," adds Cherry. Nissan has committed to expand facilities at both its Smyrna location and the Decherd engine assembly plant. Nissan expects to pump $1 billion into the Decherd facility over the next four years, while adding about 1,000 workers to the current payroll.
        The Knoxville area has emerged as a popular distribution point, with easy access to northeast markets. Grubb & Ellis notes that there is a deficit of warehouse space over 10,000 sq. ft. (929 sq. m.), due to zoning restrictions on available land. The vacancy rate for standard industrial space in the Knoxville area was 8.9 percent at the end of 2001. R&D flex space is higher at approximately 9.7 percent.
        Commercial office space is also readily available in the Knoxville area, with rates currently ranging from $19.54 to $19.85 per sq. ft.. Leases are now attractive since the national average is at approximately $32 per sq. ft. Vacancies in the area are at an all time high, and net absorption is well below the record levels the area saw in 2000.

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