Since opening in 1998, when Dial Corp. took the first building here, the site has attracted an impressive roster of tenants. In addition to GEODIS and DB Schenker, other tenants include Amazon, Ozburn-Hessey Logistics, Saddle Creek Logistics Services, and many others.

“From an investors' perspective,” says Towerman, “all of these major companies coming here puts a stamp of approval on the location. Not a single tenant in 19 years has left the submarket.”

And investors can expect better returns from Midwest markets like this, especially when compared to those in top coastal or core markets. Similar properties in Miami, Towerman points out, can cost $191 per square foot, with land priced at $18 per square foot. “Our land costs less than $1.50 per square foot.” Investors here can get a 6.23% return on costs, whereas in Atlanta, Dallas, or Chicago, a comparable building would bring in something closer to 4.% to 5.0%.

And new development is not slowing down. Towerman says that Tri-Star and PCCP are currently planning to complete by January a new $26 million speculative distribution center at Gateway. Called Gateway East 594, the 593,940-square-foot cross-docked facility has 36' clear-height ceilings, 570 feet of depth, 66 dock doors and two drive-in doors. Expandable to roughly one million square feet, it is the partners' fifth distribution facility at Gateway.

“With 18 bulk buildings, Gateway's development team continues to adhere to a proactive philosophy that anticipates the need of major consumer goods companies for efficient, expandable bulk space configurations,” says Lampitt.

ST. LOUIS—The US industrial sector has entered a golden age, and investors have become eager to buy up class A properties in both core and secondary markets. Developer TriStar Properties has sold two mega-cube distribution centers it completed earlier this year at Gateway Commerce Center in Edwardsville, IL, to Dallas-based L&B Realty Advisors. The buildings total 1.14 million square feet and occupy a combined 99 acres of land. GEODIS and DB Schenker, both international 3PLs, each recently agreed to lease one of the new structures. The sales price was $64 million.

PCCP, LLC, a national real estate finance and investment management concern, teamed up with TriStar to develop the buildings at Gateway, a 2,300-acre logistics and bulk distribution park located across the Mississippi River from St. Louis in the Metro East submarket. Gateway now has around 13 million square feet, and has become one of the most coveted industrial sites in the Midwest.

“I've been working in this specific submarket for 21 years, and this is the best it's ever been,” Michael Towerman, principal with Tri-Star, tells GlobeSt.com, both in terms of tenant and capital demand. ”Spec buildings have traditionally leased prior to completion. Investors see that there is no vacancy in this park, ever.”

The sale is the largest industrial property transaction in the metro St. Louis market in 2017, says Ed Lampitt, managing director of the St. Louis office of Cushman & Wakefield, the leasing agent for Gateway.

Since opening in 1998, when Dial Corp. took the first building here, the site has attracted an impressive roster of tenants. In addition to GEODIS and DB Schenker, other tenants include Amazon, Ozburn-Hessey Logistics, Saddle Creek Logistics Services, and many others.

“From an investors' perspective,” says Towerman, “all of these major companies coming here puts a stamp of approval on the location. Not a single tenant in 19 years has left the submarket.”

And investors can expect better returns from Midwest markets like this, especially when compared to those in top coastal or core markets. Similar properties in Miami, Towerman points out, can cost $191 per square foot, with land priced at $18 per square foot. “Our land costs less than $1.50 per square foot.” Investors here can get a 6.23% return on costs, whereas in Atlanta, Dallas, or Chicago, a comparable building would bring in something closer to 4.% to 5.0%.

And new development is not slowing down. Towerman says that Tri-Star and PCCP are currently planning to complete by January a new $26 million speculative distribution center at Gateway. Called Gateway East 594, the 593,940-square-foot cross-docked facility has 36' clear-height ceilings, 570 feet of depth, 66 dock doors and two drive-in doors. Expandable to roughly one million square feet, it is the partners' fifth distribution facility at Gateway.

“With 18 bulk buildings, Gateway's development team continues to adhere to a proactive philosophy that anticipates the need of major consumer goods companies for efficient, expandable bulk space configurations,” says Lampitt.