MINNEAPOLIS—As reported in GlobeSt.com, United Properties just closed on the land acquisition for its Red Rock Industrial Building, a 320,000-square-foot speculative project in suburban Maple Grove. The company will begin developing the facility, near the intersection of County Rd. 81 and 89th Ave. North, today and plans to finish by June 2015.
“We have a great story to tell prospective tenants,” Brandon Champeau, vice president, tells GlobeSt.com. There are not too many pieces of vacant land ready for development in the immediate area, he points out. “The next place to go is in Rogers, and we think our site has a clear location advantage being 10 miles closer to the downtown core. Hopefully they will look at our site first.”
The regional industrial market is one of the strongest in the US. The vacancy rate 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.
Champeau says this new facility, one of the largest active industrial construction projects in the Twin Cities, has advantages that set it apart. “One of the things we're excited about is the amount of trailer parking we can offer. For tenants that have a lot of trailers, it's expensive to park them off-site.” To attract them, Red Rock will have 88 spaces, and he expects tenants with a heavy focus on trucks to give the space the most serious consideration.
UP had originally decided to build two buildings on the site. One of them was to have 32' clear ceilings and 180,000-square-feet and the other with 24' clear ceilings and 140,000-square-feet. “Our goal was to build the 180,000 building first,” Champeau says. But further discussions with clients convinced company officials that the region has many companies that need about 200,000-square-feet, which led to the plan for one big building. “The construction cost savings are considerable and that will allow us to get more aggressive in the rental rates.”
Although Champeau agrees that the region's industrial market is very robust he does not “think the vacancy rate will drop significantly.” Open spaces tend to get filled with “tenants who are in several buildings and that means they are generally upgrading to more efficient space.”
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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.
