MINNEAPOLIS—United Properties has just closed on the land acquisition for its Red Rock Industrial Building, a speculative project in suburban Maple Grove. At 320,000-square-feet, it could be the largest active industrial construction project in the Twin Cities area, surpassing the 300,000-square-foot facility that Duke Realty is building for Ruan Transportation and Scannell Properties' 315,000-square-foot FedEx Distribution Center. UP will begin construction of its new building, located near the intersection of County Rd. 81 and 89th Ave. North, on Monday and plans to finish by June 2015.
The Minneapolis-based company has launched this speculative project at a very promising time. The industrial vacancy rate for the metro region fell to 9.1% in the second quarter, according to Colliers, a drop of 30 bps since the end of last year. And the vacancy rate is even lower in Maple Grove's Northwest submarket. In the second quarter the rate there fell to just 8.1%. Furthermore, industrial developers across the region have more than 2-million-square-feet under construction, much of it in the Northwest.
United Properties received approval from the City of Maple Grove in August for the 32' clear ceiling industrial building, originally proposed as two separate buildings totaling 320,000-square-feet. But after revaluating tenant requirements in the market and rising construction costs, UP decided one larger building was more cost effective.
“Given the lack of large sites near the 494/694 loop, we are excited to bring our building to the market,” said Brandon Champeau, vice president, United Properties, in a prepared statement. “We appreciate the city's willingness to work with us to amend the plans and keep us on schedule.” He was unavailable for further comment yesterday, but GlobeSt.com will provide an update on Monday.
Cushman & Wakefield | NorthMarq's Jon Yanta, Jason Meyer and Brent Masica have already begun marketing the property. The project team also includes Lampert Architects, the engineering firm EVS, Inc. and RJM Construction.
“Amazon, Nilfisk, and FedEx are all searching for large requirements in the West/Northwest submarket,” Colliers stated in its latest market report. “This strong demand from users continues to encourage more speculative development in the market. In addition, our professionals suggest that office warehouse rents in the West/Northwest still have room to grow. For now, the future is still looking bright.”
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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.
