ST. LOUIS—Until recently, speculative industrial development had vanished from the St. Louis area, but the reviving economy has lifted manufacturers and distributors, sent vacancy rates plunging, and gotten developers interested in taking risks again. PCCP, LLC, a real estate finance and investment management firm, and St. Louis-based TriStar Properties, for example, just formed a joint venture to acquire 45 acres of land for the speculative development of a 673,000-square-foot bulk warehouse building at TriStar's Gateway Commerce Center just east of St. Louis.
As reported in GlobeSt.com, research on industrial activity in the first quarter showed why speculative projects were feasible. The industrial market recorded 1,795,283-square-feet of positive absorption. “That is more than in all of 2013,” Ed Lampitt, vice president and principal of Cassidy Turley in St. Louis, told GlobeSt.com. “And 2013 was an awfully good year.”
“We haven't had that kind of absorption since 2004,” added Alex Cain, a financial analyst in Cassidy Turley's St. Louis office.
Although that torrid pace abated in the second quarter, vacancy rates in some sectors are approaching historic lows. The rate for bulk warehouses, for example, hit 4.1%, according to CBRE. Furthermore, the market has less than 10 availabilities larger than 100,000-square-feet.
Development of the new building will begin immediately. It will include a 32' clear height, cross-docks, 172 trailer spaces, up to 264 car parking spaces, and an ESFR system. The partners anticipate completing the project by February 2015.
Gateway Commerce Center, a fully leased, 2,000-acre industrial park that includes major tenants such as P&G, Hershey's and Unilever, sits on the loop of I-270 and I-255 and connects easily with four other major interstates, including I-70, I-55, I-44 and I-64.
“PCCP sees this as a solid development opportunity,” says Jim Galovan, managing director with PCCP. “The demand for large space requirements outweighs the availability in this market, and we believe this quality project will lease up quickly either to a single tenant or several users.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
