FEATURE ARTICLE, JUNE 2006

INDUSTRIAL PARKS RISING IN THE REGION
New industrial developments are springing up across the Southeast.
Daniel Beaird

Southeast Real Estate Business magazine recently took a look at some new industrial developments and one redevelopment across the Southeast. Properties featured in the article include IDI’s Stateline Business Park in Southaven, Mississippi; Preston Partners’ Preston Gateway Corporate Park in Hanover, Maryland; ProLogis’ ProLogis Friendship Business Park in Buford, Georgia; Duke Realty Corporation’s Crossroads Distribution Center in Orlando, Florida; Lincoln Property Company’s Westridge Logistics Center in McDonough, Georgia; and Hollingsworth Capital Partners’ Donaldson Industrial Park in Greenville, South Carolina.

In Southaven, Mississippi, IDI is developing the 230-acre Stateline Business Park, which is currently 1.3 million square feet and will be built out to 3.8 million square feet. Located on Stateline Road just east of Swinnea Road and 1.25 miles from Interstate 55, Stateline Business Park first began development in October 2004. Four buildings have been constructed, which represents approximately 30 percent of the total development. The $125 million development is expected to be completed in 2009. “Location is one of the site’s major assets,” says Kurt Nelson, vice president and development officer of IDI. “It’s located 3 miles from the Memphis International Airport as well as the FedEx and UPS hubs, both of which are on airport property.” A property tax structure that is less expensive than Memphis’ was another reason the Southaven, Mississippi, site was chosen.

IDI has made Stateline Business Park available to logistics-oriented users such as corporate clients that require distribution centers and third-party logistics firms that operate facilities for one or more clients. “Memphis is a fantastic location for large distribution centers that rely on multiple modes of transportation such as container via rail, truck, parcel or air to distribute goods,” Nelson says. Currently, Stateline Business Park is home to Spectrum Plastics, which uses 55,000 square feet of space. Another 137,000-square-foot tenant is still confidential. 

In Hanover, Maryland, local developer Preston Magellan LLC and Prudential have partnered to develop the Class A Preston Gateway Corporate Park, an 88-acre, 1.1 million-square-foot, phased industrial project. Phase I of this new development, located on Magellan Road close to Maryland State Routes 295 and 100 and Interstate 95, includes Buildings A and B, and is already completed. Phase II, which includes Building C, is being constructed; and Phase III, which includes Building D, is being prepped for development. Only 1 mile away from the Baltimore/Washington Airport, the site was chosen due to its proximity to the airport, the NSA and other related industries. “This was a good development opportunity for us because there is a limited amount of land in the Baltimore/Washington, D.C., corridor on which to build,” says Robert Clements, executive vice president of Preston Partners. The projected cost of Preston Gateway Corporate Park is $60 million.  

The 271,553-square-foot Building A is in leasing stages, while the 313,850-square-foot Building B is fully leased. Both buildings are concrete tilt-up, build-to-suit facilities. Phase I’s significant tenants include Owens & Minor, a distributor of national name brand medical and surgical supplies, which occupies 223,000 square feet of space; Elite Spice, a specialized spice, seasoning, capsicum, oil and oleoresin, and dehydrated vegetable producer, occupies 180,000 square feet of space; and the U.S. General Services Administration occupies 144,000 square feet of space.

Some of the loading amenities included within Buildings A and B are 32-foot clears; 50 dock doors that measure 9-by-10 feet apiece; two drive-ins measuring 12-by-14 feet; and cross docking capability with 75 dock doors for each building. ESFR sprinkler systems are located within both buildings as well. “The site’s flexibility between the two buildings allows for substantial parking to serve demanding requirements for distribution and for high-density employment,” Clements says. “This will be the case for the other buildings within the development as well.” Currently, 47,700 square feet of space within Phase I is still available for lease.

Building C, being developed within Phase II of Preston Gateway Corporate Park, features some of the same loading amenities as Buildings A and B. The 176,053-square-foot Building C offers a 28-foot clear; 34 dock doors that measure 9-by-10 feet apiece; two drive-ins measuring 12-by-14 feet; and cross docking capability with 45 dock doors for the building. When completed in September, Building C will also feature a 50-foot staging area and 120-foot truck court with a 60-foot concrete dolly pad. The building includes an ESFR sprinkler system as well. The facility will be ready for occupancy in the third quarter of this year. Like Buildings A and B, Building C features concrete tilt-up construction and a build-to-suit option.

Meanwhile, the developers plan to complete Phase III of the project, which includes Building D, in December. The final building will be 300,000 square feet in size with a 32-foot clear. Building D’s loading amenities will include 50 dock doors measuring 9-by-10 feet; two drive-ins measuring 12-by-14 feet; and cross docking capability with 70 dock doors for the building. Like Building C, this final building will also offer a 60-foot staging area and a 120-foot truck court with a 60-foot concrete dolly pad. It will also feature an ESFR sprinkler system. Occupancy will be available immediately after completion late this fall.

In the Atlanta suburb of Buford, Georgia, ProLogis is developing ProLogis Friendship Business Park. Located near the intersection of Atlanta Highway and Friendship Road off Interstate 985, the 42-acre industrial park will be used for distribution, office space and other uses. The project is in its initial phase of development. The first phase will consist of three facilities ranging in size from 135,000 to 175,000 square feet. ProLogis will pursue a build-to-suit option up to 500,000 square feet as well. Construction on ProLogis Friendship Business Park will begin in the second half of this year. “We chose the site because of its close proximity to Atlanta’s northeastern suburbs, which are experiencing strong economic growth,” says David Welch, first vice president and Atlanta market officer for ProLogis. “It also creates easy access to a growing population and an underserved base of small business through its close proximity to major highways and Interstates 985 and 85.”

ProLogis Friendship Business Park will serve small- to medium-size users that require between 30,000 and 50,000 square feet. “We believe there will be a strong demand from small- to mid-size users wanting to enhance and streamline their business operations,” Welch says. While ProLogis does not have any future tenants signed on for the project; according to the company, it is in discussion with several interested parties.

Duke Realty Corporation’s Crossroads VII in Orlando, Florida.

Duke Realty has the option of constructing another 400,000 square feet within Crossroads Distribution Center. “The site was chosen due to its close proximity to the Florida Turnpike and Beachline Expressway interchange as well as the strength of the south Orlando industrial market,” says Doug Irmscher, senior vice president of Florida operations for Duke Realty Corporation. “The basic infrastructure of the site was already in place, which allowed us to bring product to the marketplace as quickly as possible,” The land on which Crossroads is being developed was one of the last available development-ready industrial sites in south Orlando.

Duke Realty is targeting users of 100,000 square feet or more that desire access to the major highways in Central Florida. While no leases have been signed yet, Duke Realty is engaged with a number of prospects. Meanwhile, the company owns an additional 53 acres of land located the intersection of Highway 27 and Interstate 4, called Park 27 Distribution Center, in Orlando. It can accommodate up to 1 million square feet of warehouse product.

Lincoln Property’s Westridge Logistics Center in McDonough, Georgia.

A unique case is Hollingsworth Capital Partners’ Donaldson Industrial Park in Greenville, South Carolina. It is a redevelopment of an industrial park that was originally constructed in the late 1950s for Woolworth. This 647,000-square-foot development includes a 30-foot clear, dock-high access all down one side and two access roads to the facility. “It was built ahead of its time,” says Trey Hollingsworth, managing partner of Hollingsworth Capital Partners. The facility is located a quarter of a mile from a former Air Force base, providing a 6,000-foot cargo runway for jets and air freight. Hollingsworth Capital Partners recently closed on the facility and construction and renovations began in May. The total project cost will be $2 million above the acquisition price.

“Greenville has long been known as a home to large and small business with tremendous investments from Michelin and BMW,” Hollingsworth says. “With a deep, skilled labor force, Greenville and Spartanburg have been attracting businesses for decades, and that is why we chose the Donaldson Industrial Park.” Greenville is South Carolina’s largest industrial market with more than 60 million square feet of bulk industrial space. Donaldson Industrial Park is slated to come completely vacant in a few months. “The total vacancy alerted us to the opportunity as total repositions are difficult, although possible, with greater degrees of occupancy,” Hollingsworth says.

The changes that Hollingsworth Capital Partners will make include new front facades and total refinishing of the exterior to create modern and consistent curb appeal for the facility; cross-docking will added to 80 percent of the back of the building as well as 35 doors added to the facility; ESFR will be installed throughout the facility; an expanded truck court area to accommodate storage of up to 250 trailers; and other amenities as well.

Hollingsworth Capital Partners would like users to take up more than 200,000 square feet if not more than 325,000 square feet of space. The facility is sub-dividable for two tenants. Liberty Construction is the exclusive construction manager of all of Hollingsworth Capital Partners’ projects and will be overseeing the redevelopment of Donaldson Industrial Park.

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