With an area of 300,000 square feet and a height of 32 feet, Prairie Business Park Warehouse III is one of the largest warehouses that R&R Realty Group has built in the company's 35-year history.
Located along South James Street in Grimes, just south of two of R&R Realty's other warehouses, the new building was designed to accommodate a variety of potential tenants.
Like its predecessors, the building started as a box-shaped blank canvas. But it could soon house a distribution center, offices, a youth sports complex — or almost anything else a tenant could dream up.
“What we try to do today is to build a lot more flexibility into our buildings,” R&R Realty president Mark Rupprecht said, standing on the bare floor near the building's large north-facing window.
As of late December, 20% of the building had been leased. The remaining 240,000 square feet where Rupprecht stood remained empty, save for a network of floor-to-ceiling columns that stand evenly spaced throughout the structure's interior.
The new building is among a growing number of warehouses under construction in the Des Moines metro.
While they may seem squarish or boring to those driving by — Rupprecht even joked that his new warehouse's name is unexciting — warehouses become central parts of their communities as they accommodate a wide variety of uses, from traditional storage and shipping to trampoline parks and technology centers.
From the beginning of 2014 to the end of 2018, warehouse inventory in the Des Moines metro grew by nearly 5.7 million square feet, or 18%, according to the most recent year-to-year data from CBRE/Hubbell Commercial. That's more than five times what the metro added in the previous five-year period.
The fastest-growing areas include Grimes and the other western suburbs, which combined to add nearly 3 million square feet during that time period. The area including northeast Des Moines, Altoona and Pleasant Hill added 1.7 million square feet, and Ankeny added 1 million square feet.
“That’s a pretty aggressive amount,” said Zach Scheckel, research analyst with CBRE/Hubbell Commercial. “And if you look at the current construction pipeline, it’s far from dwindling. It’s picking up.”
That's because more than 1.3 million additional square feet of industrial space is in the works, according to the CBRE/Hubbell Commercial third-quarter report for 2019.
That number doesn’t even factor in the metro's largest in-progress warehouse construction project, which is code-named "Project Bluejay." The 780,000-square-foot warehouse project in Bondurant is expected to open in late 2021, and all signs indicate it will be an Amazon fulfillment center.
The 'golden child' of the market
Warehouse growth in the Des Moines metro comes as construction has been strong nationally. A CBRE national market outlook from 2019 showed that demand for industrial space has consistently exceeded supply over the past few years, leading to historically low vacancy rates.
A CBRE/Hubbell Commercial market report for the Des Moines metro from early 2019 described the area as "no longer a secret" and "on the radar as a distribution hub."
“Coming out of a downturn, apartments seemed to be kind of the golden child of the market. I think industrial is really that right now,” said Marcus Pitts, managing director at Jones Lang LaSalle Brokerage in Des Moines.
One of the reasons is the continued growth of e-commerce, said University of Iowa professor Barrett Thomas, executive officer for the Tippie College of Business’s Department of Business Analytics.
Thomas said that as customer expectations have turned to faster shipping times, companies have begun to build more distribution centers at the local level, as opposed to maintaining only a few larger central ones.
“Amazon has very clearly driven the expectations of shipping down from weeks to two days to next-day to now, obviously, in some locations they’re already doing same-day delivery,” he said. “What’s clear is that the online trend isn’t ending.”
Another large factor has been location and the growth of Des Moines. Sitting at the intersection of interstates 35 and 80 has made the Des Moines suburbs an attractive location for distributors seeking easy transportation access.
Mark Larson, senior vice president of Graham Warehouse, said the northeast portion of the metro where his company builds is located in close proximity to the major carriers, which is an advantage.
"Right there on the northeast side of Des Moines you have all the carriers, which bodes well for the shippers, who are the users of warehouse space," he said.
Graham Warehouse owns one of the largest warehouses in the metro — 675,000 square feet located at 4950 NE 29th St. in Des Moines — and is currently working on a series of speculative warehouses on 75 acres of land east of Facebook's data center complex in Altoona.
Cities tout 'great variety' of uses
Grimes didn't necessarily go looking for a boom in warehouse construction, city administrator Jake Anderson said.
But its position near interstates 80 and 35 made it a natural fit for companies like Hubbell and R&R Realty to place their warehouse projects over the past several years.
"I think it’s just happened to Grimes based on our location," he said.
It's similar in Ankeny, which has a large amount of land near interchanges zoned for industrial and commercial use, Ankeny's economic development director, Derek Lord, said.
"We haven’t made that like our highest priority for the city," Lord said. "But if you look nationwide and read any real estate trade journals, industrial warehouse space is arguably the strongest real estate development investment nationwide."
In Ankeny, Hubbell has begun work on a series of speculative warehouse buildings in the city's Crosswinds Business Park, which will soon be home to other projects such as a Northern Tool distribution center; Kreg Tool’s office, manufacturing and warehouse facility; and Ruan Transportation Management Systems’ operations and training center.
Lord said the development has been a positive in adding to the tax base without putting a large strain on city services.
Anderson agreed that warehouse construction has been positive for growth in the city's tax base. He said news like that of the Amazon's announcement of its plans to open a delivery station in 2020 at Grimes Business Park as early as March makes him optimistic it could lead to more commercial development like restaurants and services.
Grimes city officials have considered whether it would be better served to stop offering incentives to new warehouse development, Anderson said, although nothing has been decided. He said the discussions are ongoing.
Brian Buethe, president and CEO of Grimes Chamber & Economic Development, said they've been impressed with the variety of uses housed in the city's structures.
In Grimes, that includes Sky Zone Trampoline Park and Pole Position Raceway, which sit in warehouses built by Hubbell west of Southeast Gateway Drive.
At R&R Realty's Prairie Business Park, tenants include IGNIT sports and Hy-Vee's Helpful Smiles Technology Center, a modern-style workspace for a couple hundred information technology, digital development and brand marketing workers.
"In Grimes, we’ve got such a great variety of uses that we didn’t anticipate when they started building a few years ago," he said. "Some of the best jobs are being created in these buildings.”
Back at R&R Realty's new Grimes warehouse, Rupprecht said the company isn't constructing any more at the moment. It's waiting on demand and for the remainder of Prairie Business Park Warehouse III to lease up.
But the company still has significant room to expand. Rupprecht pointed to 80 acres to the south, at the intersection of Meredith Drive and Northwest 128th Street near the border of Urbandale and Grimes, as land owned by R&R and ready for future development when the time comes.
"The economy is still good and strong," he said. "As we lease up and see demand we’ll continue to add."
Ian Richardson covers Ankeny and Altoona for the Register. Reach him at irichardson@registermedia.com, at 515-284-8254, or on Twitter at @DMRIanR.
Your subscription makes work like this possible. Subscribe today at DesMoinesRegister.com/Deal.
"warehouse" - Google News
January 16, 2020 at 03:10AM
https://ift.tt/2TrSh0V
It's not just Amazon: Warehouse construction is booming in Des Moines - DesMoinesRegister.com
"warehouse" - Google News
https://ift.tt/2LrWpcs
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
No comments:
Post a Comment