New Corporate Residents
Could Revive Piedmont Triad

Some new corporate residents could help North Carolina's Greensboro/Winston-Salem area pull out of its slump.

The so-called Piedmont Triad region was once a manufacturing powerhouse teeming with cigarette, apparel and furniture plants. But in recent decades the economic clout of the area has slipped. Home to about 1.1 million people and anchored by the cities of Winston-Salem, Greensboro and High Point, the seven-county region has been overshadowed by its higher-profile neighbors of Raleigh-Durham and Charlotte, says Michael Walden, an economics professor at North Carolina State University in Raleigh.

Now some real-estate experts say they are encouraged by the arrival of such major employers as FedEx Corp. and Dell Inc., both aggressively courted by government tax-incentive packages. They also were attracted to the region by its central Eastern location and excellent highway system.

In 2005, Dell opened a 750,000-square-foot manufacturing facility in Winston-Salem. The facility, next-door to tobacco fields, is Dell's largest manufacturing plant in the world, a Dell spokesman says. FedEx is building a new cargo hub at the Piedmont Triad International Airport in Greensboro. Scheduled to begin operating in 2009, the hub will be the company's eighth in the U.S.

Some developers say the arrival of FedEx helps position the region to benefit from the national demand for larger modern distribution warehouses. That belief has spurred some developers to begin building even as vacancies in older manufacturing facilities remain high. Highwoods Properties Inc., a Raleigh real-estate investment trust, is building a speculative 120,000-square-foot warehouse distribution building near the airport. "Advanced manufacturing, distribution and logistics will be an area where the Piedmont Triad will emerge as a major player," says Don Kirkman, president of Piedmont Triad Partnership, an economic-development group.

Building prices also are among the lowest in the low-cost Southeast, a factor that prompts some companies to begin considering the region. The average price of $20 a square foot paid for industrial buildings in the Greensboro region for most of 2006 was well below the $55 paid in Raleigh-Durham and the $61 fetched in Charlotte, based on a survey of deals valued at $5 million or more by Real Capital Analytics, a New York real-estate research firm.

The Triad is due for some good news. As goods producers struggle to compete with cheaper labor outside the U.S, the Triad area has lost about 30,000 manufacturing jobs since 1997, according to the Bureau of Labor Statistics. In addition, Winston-Salem's financial sector was also hit by the move of Wachovia Corp.'s headquarters to Charlotte after the merger with First Union Corp. in 2001, though the merged company still has about some employees in the Winston-Salem region.

The office and industrial warehouse markets are still feeling the effects as manufacturing companies trimmed office space and darkened plants. Roughly one-fifth of the region's office and industrial space is still vacant, according to Carolinas Real Data, a commercial real-estate research firm.

The bleeding of manufacturing jobs has slowed recently as the region saw overall positive, albeit still below-average, job growth of 0.7% in December from the year-earlier month. Mr. Walden says the area's growth still will be slow as it tries to find its way in the new economy. "They're trying to move into the information age, but growth is being held back because they still have ties to the old economy, which is downsizing," says Mr. Walden, noting the labor-intensive textile and apparel sector is still contracting.

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