"I really can't speak publicly about exactly what's going on in Louisville and Cincinnati," says John Begier, EVP acquisition and development at Keystone. "We will be doing land acquisition in both those markets and you can expect some major big-box development announcements next year."
Indicative of the scale of Keystone's distribution facility development plans in the Midwest is the trust's massive 490-acre Airtech Park in Plainfield, IN, just minutes from Indianapolis International Airport and Fedex's second largest air freight hub.
The trust broke ground on an 800,000-sf speculative warehouse at Airtech last July, which promises to be just the beginning. "This park has the capacity for an additional nine projects of this caliber, which we plan to roll-out on a yearly basis. The decision cycle for distribution users is generally less than six months. Our plan is to continually bring inventory on-line," says David Hagan, vice president of development at Keystone.
Keystone has been in a disposition mode as it shifts focus to development of big-box warehousing in the Northeast and Midwest. The trust sold its remaining New Jersey office assets for $82 million in July, bringing its total dispositions for the year to over $105 million. Keystone's office properties in New York and Pennsylvania are still on the block.
The shift into distribution warehouses will pit Keystone against the likes of Prologis and First Industrial REIT, which also have aggressive expansion plans in the central states. "We plan to be a dominant player in that corridor in Ohio, Indiana and Kentucky, says Begier. "UPS has its main hub in Louisville. We like to be near these hubs because they bring in distributors."
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