(Read more on the industrial market.)
SALT LAKE CITY-A joint venture of First Industrial Realty Trust and the California State Teachers' Retirement System has acquired 140 acres of raw land here that can support 2.5 million sf of development. Acquired for $18 million, the land is located in the northwest quadrant of the airport submarket, near Interstate 80 and a Union Pacific Railroad intermodal center that is the first point of intersection in Union Pacific's rail system for freight traveling from the three largest West Coast ports: L.A./Long Beach, Seattle/Tacoma, and Oakland.
To be known as First Park Mountain View, the land can hold distribution centers, light industrial and R&D/flex facilities. James Merrill, regional director of Chicago-based First Industrial's Salt Lake City office tells GlobeSt.com that the JV will spend an additional $6.5 million outfitting the land with utilities and roads and breaking it up into multiple parcels. After that, the JV expects to sell about 40% of the land as building-ready parcels, deliver a speculative 470,000-sf distribution center on 22 acres in late 2008, and retain the remainder for future phases.
The speculative distribution building will be divisible into six units but, based on demand, more likely will be divided into between two and four units, Merrill says. The JV likes its chances for a strong lease-up because vacancy in big box distribution centers in the region is in the low single digits. “Inventory in that sector of the market is really about full,” Merrill says. “There's only a 3% or 4% vacancy in that segments and its going away pretty quickly.”
The triple net asking rent for the building will be about $4.35 per sf per year, which translates to $0.37 per sf per month. The asking price for the building-ready development sites the JV will create was not immediately available, but its cost basis in the land will be north of $4 per sf after the infrastructure work is complete.
“The local economy here is growing at twice the national average,” Merrill says. “In my 15 years here I have never (until now) seen all sectors going full-bore; we're looking at the next two years being growth years.”
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