COVER STORY, DECEMBER 2006

A DOUBLE PLAY IN SAVANNAH
DP Partners is planning two major industrial parks in proximity to the Port of Savannah.
Chris Thorn

The momentum of the Savannah industrial market received another boost with DP Partners’ planned acquisition of two separate sites for industrial parks that will ultimately offer a total of more than 6 million square feet of space. The Reno, Nevada-based developer has designs for two major parks in the coastal area, which the company views as one of the most robust and deep markets in the country.

LogistiCenter at Savannah, which uses the company’s national name brand “LogisitiCenter” in the title, is located in Effingham County, Georgia, and is the larger of the two parks. DP is acquiring the land from the Effingham County Industrial Development Authority and expects to  go to contract on the 1,738-acre site by year’s end. Situated on Interstate 16, the site is only 8 miles from the I-16 and Interstate 95 interchange and 15 miles from the Port of Savannah.

“This project’s key asset is its location,” says Aaron Paris, executive vice president and COO of DP Partners. Paris expects the park’s easy interstate access to attract users with a wide variety of space requirements, and DP Partners will develop LogistiCenter with this tenant mix in mind.

Currently, the park contains 640 developable acres spread out between various wetlands and retention ponds, allowing the developer to space out facilities of varying size with natural barriers. During a 5- to 7-year period, DP plans to complete eight to 15 speculative facilities depending upon how the market dictates building sizes. As a measuring stick, DP plans to construct a 400,000-square-foot distribution center (expandable up to 1 million square feet) to kick off the park within the next 2 years.

“We are testing the market,” Paris says. “We want to see if it is a 400,000-square-foot market or a 200,000-square-foot market. Maybe even a 1 million-square-foot market.”

The majority of DP Partners development is speculative, and LogisitiCenter at Savannah will be no different. However, Paris notes the company’s process is slightly different than standard speculative practices.

“I like the term spec-to-suit,” he says. “We start the building process and identify a user during construction. The user then asks for some specific modifications, and we’re off to the races on a spec-to-suit project.” Also, the developer is open to doing build-to-suit work or even selling land outright to an appropriate corporate user, such as a large retailer for a distribution hub.

“If a big name in retail or manufacturing wanted to buy land in the park, obviously we would sell in a heartbeat to have that kind of name in the park,” Paris says. Currently, Target and IKEA are developing massive distribution centers in the Savannah area, and Paris expects to see similar users join the retail giants.

Because of the layout of the site, LogistiCenter will be equipped to handle facilities of that large scope, but it also will have room for smaller users as well. Paris says building sizes should range between 20,000 square feet to 2 million square feet in expectation of users  gobbling up space on both ends of the spectrum. But, he does not expect to see too many users with midsize space needs at LogistiCenter, which is why DP is developing a second park aimed specifically at this niche just a few miles outside of the Port of Savannah.

LogistiPort at Savannah will be an approximately 1 million-square-foot, two-building park located 4 miles west of the port on Dean Forest Road. This is actually the first park DP will tackle in the area as it plans to break ground in the spring. The park will include a more than 600,000-square-foot, cross-dock building and a 300,000-square-foot rear-loaded facility.

“Because of the site’s size and the amount of dirt work that needs to be done, we will build both buildings at once,” Paris says. “LogistiPort should lease up very quickly.”

The park is primed for tenants looking for space between 50,000 to 150,000 square feet. Or for a 3PL with individual clients needing 50,000 square feet each that can be bundled into a 300,000-square-foot package in either one of the buildings, which will be divisible into smaller spaces for specific users. Paris hopes LogistiPort will cater to the needs of the excellent 3PLs operating in Savannah.

The buildings at LogistiPort should be ready for occupancy by the third quarter of 2007.

“The strategy is very simple,” he says. “Just as we finish construction and enter leasing of LogistiPort, we should be starting construction on LogistiCenter. The timing will work out perfectly.”

With two major parks in the planning stages in Savannah, Paris feels the area will continue to be a highly active industrial market.

“Because we are long term-holders, we like Savannah because it offers  us long-time value,” he says. “This is a market where rents will continue to rise.” This bullish outlook on the future influenced DP Partners to open a regional office in Savannah, which will serve as staging ground for searching for opportunities in other Southeastern coastal markets, such as Charleston, South Carolina, and Jacksonville, Florida.

But Savannah is the current target and Paris expects much success in the market due to the extensive industrial infrastructure already in place and solid leadership at the Port of Savannah.

“For a small community, it is truly remarkable that it has all of  these industrial resources,” Paris says. “They should be proud of what they’re doing as a city, as a port and as a people on the development front.”

©2006 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.