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CARLSBAD, CA—While creative space has taken the office market by storm, industrial users are also craving these amenities, SR Commercial's principals Adam Robinson and CJ Stos tell GlobeSt.com. As GlobeSt.com reported last week, the privately held, full-service commercial real estate investment company has acquired an 11.8-acre land parcel in Carlsbad on which it plans to develop a 151,500-square-foot, multi-tenant industrial distribution project. We spoke with Robinson and Stos exclusively about the lack of multi-tenant industrial space here and their plans for the new development.

GlobeSt.com: Aside from an improving economy increasing absorption, what has created the lack of multi-tenant industrial space in Carlsbad and the demand for it?

Robinson: In Carlsbad, there's only about 500 thousand square feet of true distribution space. Most space has gone to higher and better use, but a lot of the bigger companies in Carlsbad need distribution space, and they're starting to go to other cities to lease it. It's a great opportunity to fill a void and the need for space here.

GlobeSt.com: Do you have plans to develop more properties of this type either in San Diego or in other markets?

Stos: We are working on some projects right now in San Diego—nothing we can publicly speak of, but some similar-sized projects.

Robinson: We are building one small 20,000-square-foot building on some excess land we purchased when we closed on a portfolio of four buildings in Vista. This was going to be spec development; however, we were able to pre-lease the building to one of our current tenants. We will be working on this over the next nine months.

Stos: We have one or two other projects that we're doing spec development on in San Diego. We're hitting the timing right because we haven't seen much development since the last cycle. We'll be the first as far as this type of product.

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Robinson: The other spec distribution project being built is in Oceanside, and it's called First Park. This development is targeting larger users—those hunting for 40,000-to-100,000-square-foot space. Our project is quite different and fills a void in the market. We are creating units between 3,000 and 7,000 square feet, with only a few larger units. It is rare to have this size space with both dock-high and grade level doors for distribution.

We're building this with state-of-the-art ceiling heights and an ESFR sprinkler system, and we're planning to hold it 15-plus years. We're parking at approx. 2.4 per 1,000, so it could go to a manufacturing or corporate headquarters tenant.

We're setting this project up to offer many different uses. Even though the building is designed for distribution, we will be able to accommodate almost any type of tenant.

GlobeSt.com: Describe the ideal user for this space.

Robinson: Quite a bit of this will come from large companies that need quality distribution space they need to keep close to their headquarters. It will attract users from all over North County and San Diego.

GlobeSt.com: What features are necessary for multi-tenant industrial properties to be successful in this market?

Robinson: Oversized grade-level doors, more truck positions, better circulation and parking and an EFSR sprinkler system—smaller high-end users have pride of tenantship and are looking for a little better image, so upgrading to nicer glass doors is helpful. They're looking for a little better-quality project, and can pay a little more rent for it.

Stos: Above-standard skylights and concrete parking lots are also important.

Robinson: Right now, creative-office space is really important to all of the office tenants, but it's starting to become more important to industrial tenants: a more creative atmosphere, exposed ceilings and polished concrete floors. This project will contain 15% to 20% office.