CINCINNATI—Construction of new industrial properties has begun again in the Cincinnati region and Douglas J. Swain of Opus Development Co. tells GlobeSt.com that the area is ready for it. “The market has been extremely tight down there and we've seen very little development until now.” As reported in GlobeSt.com, Opus has just started two speculative industrial buildings at Port Union Commerce Park in suburban Fairfield and West Chester that will total more than 800,000-square-feet of space. “There has not been a lot of interest from developers but there has certainly been demand.”
“The big challenge for developers is to find good sites,” Swain adds. The Cincinnati native knows the market well, and points out that a good portion of the metro area is across the Ohio River in Kentucky, a region with somewhat rough terrain that makes development difficult. And on the Ohio side, much of the land just north of the city is taken up by retail and residential use.
Still, the region's central location has made it quite popular with distributors, many of whom have flocked to towns like Fairfield and others northwest of the city along I-75. According to a recent report by CBRE, bulk warehouses had a vacancy rate of just 4.8% at the end of the third quarter. Furthermore, the industrial market had seen 3.4-million-square-feet of absorption in the first three quarters.
And although the company won't finish the two buildings, one of 260,000-square-feet with 28' clear height, and another of 547,000-square-feet with 32' clear height, until September, potential tenants are already lining up. “We've got several active proposals,” says Swain. “That shows the level of demand in the market.” The new buildings will sit alongside the park's two existing structures, both fully-occupied and which have a total of about 840,000-square-feet. Founders Properties, LLC, a frequent partner of Opus, bought the existing buildings and vacant land last year for $42 million.
Opus and Founders began analyzing the market last year in order to gauge what type of product local users wanted. They ended up going with two different product types. The smaller building will most likely accommodate tenants that need between 50,000-square-feet and 100,000-square-feet, such as pharmaceutical firms or perhaps tech companies, Swain says. And the larger one can tap into the demand for more bulk distribution space.
He also sees a lot of organic growth among companies in the region, including those making inquiries about the new speculative projects. “That speaks well of the market. I'm almost certain we will have some leases completed by the time the buildings are finished.”
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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.
