Archive for the ‘Uncategorized’ Category

December 15, 2022

MSI to Establish East Coast Distribution Facility in Virginia

RICHMOND, VA – Governor Glenn Youngkin today announced that M S International, Inc. (MSI), the leading supplier of flooring, countertops, wall tile, and hardscaping products in North America, will invest $61.6 million to establish its East Coast distribution facility in the City of Suffolk. McDonald Development will construct a new 548,000-square-foot building at 2821 Holland Road for the company. Virginia successfully competed with Georgia, New Jersey, and South Carolina for the project, which will create 80 new jobs.

“Virginia is one of North America’s premier supply chain destinations, and we are excited to welcome M S International’s East Coast Distribution facility to the Commonwealth,” said Governor Glenn Youngkin.“MSI will benefit from Suffolk’s prime location and proximity to our world-class port facilities, and we look forward to their success in the Hampton Roads region.”

“When a global company like M S International chooses Virginia for a major distribution operation to reach critical markets, it reinforces our strategic location and logistics infrastructure that is second-to-none,” said Secretary of Commerce and Trade Caren Merrick. “The Commonwealth offers companies a single gateway into critical customer markets, and MSI will complement Suffolk’s impressive roster of supply chain management companies.”

“MSI is very excited with this huge expansion of our distribution footprint in Virginia. This new hub distribution center will dramatically improve our long-term distribution capabilities across the Mid-Atlantic and Mid-West,” said Rup Shah, President of M S International, Inc. “In addition, we are very impressed with The Port of Virginia and its continued investments to insure a smooth flow of goods. Finally, both the high-quality workforce in the region combined with a very business-friendly environment were both major contributing factors to our decision.”

“On behalf of the City of Suffolk, we are pleased to share in the announcement that M S International, Inc. is expanding their distribution capabilities in our city,” said City of Suffolk Mayor Michael Duman. “Suffolk welcomes and appreciates the $61.6 million investment in this 500,000-square-foot building. The expansion will create 80 new jobs and add to our growing tax base.”

“We applaud M S International’s decision to build its East Coast distribution center in Suffolk, Virginia and capitalize on the access to global markets offered by The Port of Virginia,” said Stephen A. Edwards, CEO and Executive Director of the Virginia Port Authority. “MSI is going to be a significant importer and the investments we’re making in our terminals will help to ensure that MSI can grow its volumes without concern. We welcome MSI and are looking forward to a long partnership.”

“I am thrilled and excited that MSI is establishing a huge distribution center in the City of Suffolk. As the Senator representing this district, I am very pleased with the capital investment and the 80 new jobs that will be coming to Suffolk! I am certain that MSI will be very pleased with the pro-business culture of the city and will find the area to be warm and welcoming to both MSI and its employees,” said Senator John Cosgrove. “Special appreciation goes out to Governor Glenn Youngkin and his economic development team for successfully competing with three other states to win the MSI project. I know that the Governor is laser focused on bringing new and high-quality businesses to the Commonwealth of Virginia, and this is a prime example of his success.”

“M S International, Inc. is a great fit for the City of Suffolk,” said Delegate Clinton Jenkins. “Suffolk’s Holland Road Industrial Parkway has the capacity to accommodate the 500,000-square-foot building needed for a distribution facility. Economic development and the creation of 80 new jobs are an added value to the Suffolk community. Special thanks to MSI for choosing to be a member of the Suffolk family.”

Founded in 1975 and headquartered in Orange, California, MSI maintains over 40 state-of-the-art showrooms and distribution centers across the U.S. and Canada, with domestic manufacturing facilities for Q™ Premium Natural Quartz in Latta, South Carolina and Premium LVT in Cartersville, Georgia. MSI’s product assortment includes an extensive offering of quartz, LVT, tile, natural stone, and glass products imported from over 37 countries on six continents.

The company imports over 70,000 containers per year and manages an inventory of more than 300 million square feet, including hundreds of thousands of slabs of natural stone and quartz. MSI has over 3,000 employees worldwide, including more than 60 in Virginia.

The Virginia Economic Development Partnership worked with the City of Suffolk to secure the project for Virginia. Governor Youngkin approved a $225,000 grant from the Commonwealth’s Opportunity Fund to assist the City of Suffolk with the project. The company is also eligible to receive benefits from the Port of Virginia Economic and Infrastructure Development Zone Grant Program. Funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program.

Contacts:

Suzanne Clark Macaulay Porter Jessica Davis
804.545.5806 Office of the Governor M S International, Inc.
sclark@vedp.org Macaulay.Porter@governor.virginia.gov Jessica.d@msisurfaces.com

Five months after its acquisition with a major industrial REIT, Ares Management Corp. has shelled out hundreds of millions of dollars for part of McDonald Development’s Southeast industrial portfolio.
McDonald sold 14 buildings across five industrial parks it developed for $395.5M, Cushman & Wakefield announced Tuesday. C&W Vice Chairman Stewart Calhoun and Senior Director Casey Masters brokered the sale for McDonald.
Sources familiar with the transaction told Bisnow a fund managed by Ares, which acquired Black Creek
Group’s U.S. business, including its $11.6B in assets, in July, was the buyer of the 2.7M SF portfolio.
Roughly 1.8M SF of the properties acquired are within 15 miles of Hartsfield-Jackson Atlanta International Airport: 1.1M SF across five buildings at WestLake industrial park, two buildings totaling 490K SF in the Southpark industrial park and a 210K SF in Southmeadow industrial park, according to the release.
Ares also acquired 310K SF in four flex buildings at Windward Ridge in the affluent North Fulton County area of Metro Atlanta and two buildings totaling more than 500K SF at Georgia Commerce Center, adjacent to the Port of Savannah.
During Bisnow’s Southeast industrial event on Dec. 15, McDonald President Austin McDonald said his firm was in the process of selling its portfolio, which was an average of 12 years old and 95% leased. McDonald also said the portfolio would sell at a 3.45% capitalization rate.
McDonald told Bisnow Tuesday that the firm sold the portfolio given that values for industrial buildings are “at all-time highs.” But the firm is ramping up its development pipeline again, with the potential for 4M SF of new projects, some of which could rise in the same industrial parks next to the buildings it just sold.
“We didn’t sell any of our existing land,” McDonald said.
Jarred Schenke, Bisnow Atlanta

Tampa, FL – Development of buildings 100, 200, and 300 of 301 Business Center mark the completion of Phase I of the park. The Class A buildings total 658,788 square feet and feature one rear-load, one front-load, and one cross-dock distribution building. Over 340,000 sf has already been leased. Construction of Phase II, a 208,000 square foot rear-load building, should begin around the 2^nd quarter of 2020. Once completed, the 68.84-acre park will total 866,878 square feet of warehouse/distribution space

Clermont, Florida – Clermont Business Center has been delivered and is ready for occupancy. The park is located on Trade Avenue at Hancock Road, just south of SR50, with convenient access to Florida’s Turnpike.  The park contains two front-load, class A, warehouse/distribution buildings totaling 107,566 square feet. Building 100 is 63,083 square feet and features 20 dock doors, 2 drive-in doors, and 26’ clear ceiling height. Goodman Distribution preleased 41,202 square feet in Building 100. Building 200 is 44,483 square feet and features 14 dock doors, 2 drive-in doors, and 24’ clear ceiling height.

Construction has officially begun on what will be Upstate South Carolina’s newest 42-acre distribution park – Carolina Commerce Center. McDonald Development Company is developing the park, which will feature two Class-A, rear-load distribution warehouses totaling 458,754 square feet. Building One will have 327,139 square feet, 32’ clear ceiling height, (32) 9’x10’ dock high doors, (38) 9’x10’ knock out doors, and (2) ramped doors. Building Two will have 131,615 square feet, 32’ clear ceiling height, (15) 9’x10’ dock high doors, (15) 9’x10’ knock out doors, and (2) ramped doors. The current completion date is set for early 2020.

McDonald Development sells recently built spec industrial building in Lee Vista

Atlanta-based McDonald Development continues to sell off portions of its master-planned business park underway in the Southeast Orlando submarket.

The latest, a 159,884-square-foot warehouse facility at 7455 Emerald Dunes Dr., just sold for $15.5 million to Los Angeles-based real estate investment trust Colony Capital – the same firm that reputably sold 474 acres near Universal Boulevard in 2015 for $130 million.

McDonald completed the warehouse this last August. The deal for the facility breaks down to about $97 per square foot. A tenant has yet to be signed on.

The warehouse, dubbed Building G, is the fourth to be completed within McDonald’s Lee Vista Business Center, a roughly 81 acre commercial park directly across from the Orlando International Airport.

Tom McFadden and William Bradford of Lee & Associates had the listing.

Once complete, the master-planned park will consist of two single-story office buildings and five rear-load distribution buildings, for a total of 925,000 square feet of commercial space.

Colony Capital, a known investor in the park, paid $47.9 million for buildings D, E and F at Lee Vista in 2016, bringing its total investment to more than $63.4 million.

The recent deal expands the REIT’s holdings in the park to roughly 639,000 square feet. According to its website, Colony Capital has $43 billion assets under management.

Tenants in the park include Zenith Lighting Inc., a stage lighting equipment supplier; LiveTV, a provider of airline in-flight entertainment systems; and German engineering and manufacturing giant, Siemens Corporation. Goodman Manufacturing and Carrier Enterprise are also tenants.

It’s unclear how much in total the seller has invested in acquiring the land where it intends to build out Lee Vista Business Center.

What is clear is that McDonald paid $1.7 million in 2016 for the lot where it built the most recent warehouse to sell. The firm bought the 11-acre parcel from Famlee Investment Co., as part of a long-standing agreement to buy and develop its property in Lee Vista over time.

The industrial property lies near a number of distribution facilities where certain well-known tenants operate.

Just south of the property is where Publix Super Markets built its $188.5 million distribution center for frozen food and produce in 2014.

Other companies with a presence in the submarket include Chrysler, Goya, Caterpillar, Lockheed Martin and Staples.

Last month, GrowthSpotter reported that a industrial property across from the site traded hands at a nearly 40 percent gain in less than four months from its previous selling price in late December.

That site will be home to TransPremier, a family-owned road construction subcontractor in Florida whose services include material hauling, asphalt milling, full road clean-up, and equipment mobilizations.

Tampa, FL – April 5, 2019 – Construction has wrapped up on 301 Business Center’s first new building – Building 300, a 341,890 SF cross-dock.  Building 300 was pre-leased by Bunzl Distribution Southeast, LLC for 212,945 square feet for a 10 year term.

Building 300 is the first building in Phase I of the park to be completed. Additional Phase I buildings scheduled for delivery this summer include Building 100, a 145,540 SF rear-load, and Building 200, a 171,448 SF front-load.

Phase II of the park will include construction of Building 400, a planned 206,400 SF rear-load.

McDonald Development plans to build a total of 230,117 square feet of industrial space on a roughly 20-acre site near Sand Lake Road and Winegard Road. [Courtesy St. Johns Water Management District]

An Atlanta-based developer is looking to build a pair of spec industrial buildings near the Florida Mall, as the industrial sector continues to heat up in Central Florida.

McDonald Development plans to build a total of 230,117 square feet of industrial space on a roughly 20-acre site near Sand Lake Road and Winegard Road, according to plans filed with the state. The developer also wants to build another roughly 1-acre outparcel at the site.

The project, called Sandlake Commerce Center, has an estimated cost of $17.2 million, according to industry standards. Construction is expected to begin this fall with delivery in summer 2019.

McDonald has been in the Orlando market for 20 years, developing over 2 million square feet, said Austin McDonald, President and COO with McDonald Development. “This site was acquired two years ago with the plan to develop it once entitled and permitted. Market leasing activity is strong and the property is ideally situated in the South Orlando industrial market.”

Co-Presidents Bo Bradford and Tom McFadden with Lee & Associates of Central Florida are handling the leasing of the space. McFadden said in an email that no leases have been signed but they are “very active” with prospects.

McDonald Development’s Mcdonald Ventures Xxxv LLC bought the property in October 2015 for $2.9 million, according to Orange County property records.

Rising rental rates and increasing demand are spurring spec industrial construction in Central Florida, local brokers told Orlando Business Journal. Developers may be more keen to pursue new industrial projects now than delay into the future as construction costs soar, said Trevor Hall Jr. of Colliers International Central Florida.

In addition, Sandlake Commerce Center’s central location near Interstate 4, State Road 417 and Orlando International Airport is also a key factor in its development. “You can look in three directions and see good leasing activity,” Hall said. “It’s a regionally significant location.”

David Perez, a senior director with Cushman & Wakefield (NYSE: CWK) in Orlando, said demand for industrial space is so intense in Central Florida that his office is fielding weekly inquiries from industrial developers looking to enter the market.  And it’s not just calls from local developers. Perez said the national perception of Central Florida is changing as the region sees growth in population and jobs.

David Perez, Cushman & Wakefield Industrial Brokerage Services Director

“It’s no longer seen as inferior to South Florida,” Perez said. “We’re starting to get to a point where it’s teetering on the edge of a primary market.” 

Orlando’s industrial vacancy fell to 4.8 percent from 5.6 percent year over year, according to Cushman & Wakefield. Rental rates also rose to $6.60 from $6.29 in that period.

Atlanta-based McDonald Development is preparing to bring more than 230,000 square feet of spec industrial space to market near the Florida Mall, with plans for the type of urban infill site that has drawn it back to Greater Orlando numerous times over the past 20 years.

Located at 7663 Winegard Road, the 20.12-acre site fronts E. Sand Lake Road and lies directly across the street from an industrial park by EastGroup Properties, and a mile northeast of the Florida Mall. McDonald bought it for $2.95 million in October 2015.

The developer has now filed development and construction plans with Orange County and the St. Johns River Water Management District for its “Sand Lake Commerce Center,” proposing two multi-tenant industrial buildings of 79,205 and 150,925 square feet, and a 1.37-acre retail outparcel on the frontage for a later phase.

“We’ve been in Orlando for two decades and built approximately 2 million square feet of industrial in the market, most of which we’ve sold,” president Austin McDonald told GrowthSpotter. “We think this is a great location, and EastGroup has done well across the street. It’s an infill site in the heart of the market, which we prefer.”

McDonald anticipates having all the necessary local permits by October to break ground, with a nine to 10 month construction window to follow. Tilt-up concrete wall construction would be done concurrently for both buildings.

He declined to estimate a total project cost, and said the company has its finalists narrowed down for the general contractor and construction lender roles.

Lee & Associates will market the space for lease, and McDonald will ultimately manage its own property.

Orlando’s industrial market finished the second quarter with net absorption of 446,332 square feet, bringing its year-to-date net absorption to 1.7 million square feet, up 35.6 percent year-on-year, according to CBRE Orlando‘s Industrial Q2 MarketView report.

Within the Southest Orange County submarket, where McDonald’s property would fall and one of six local submarkets measured by CBRE, total inventory through Q2 was more than 40.67 million square feet (ranked 1st of six), total vacancy rate was 6.8 percent (ranked 5th), average asking lease rate was $6.30 (ranked 3rd), and year-to-date net absorption topped 769,000 square feet (ranked 1st).

Florida Engineering Group is civil engineer on the project, Tampa-based HTG is the architect, PSI led geotechnical work and Benchmark Surveying & Mapping was the surveyor.

Spartanburg County’s spec market is undergoing an unprecedented expansion. Here’s a look at the projects and factors fueling the growth.

Nothing screams progress like vacant buildings. Right?

Well, in Spartanburg County, speculative, or spec, industrial facilities are seeding the growth of an economy that already reaped a harvest of more than $5.75 billion in capital investment and 12,000 jobs during the past eight years.

Spartanburg’s spec market is in the midst of an unprecedented expansion.

During the past 18 months, at least six major new developments have been announced that promise to bring about 3 million square feet of spec space to the market by early 2019.

When combined with several ongoing projects, the county’s inventory of spec space could jump to more than 4 million square feet during the next year.

“When the economy crashed in 2008, we couldn’t beg, plead, or borrow a spec building,” said Spartanburg County Councilman David Britt. “We lost all of our inventory [of available buildings]. It made it very challenging to land companies.”

So what exactly is spec?

Typically, spec is a term used to describe buildings that are not build-to-suit, meaning tailored to meet the needs of a specifc tenant.

Spec buildings usually appeal to a broad range of users.

The advantage is that they enable new or expanding companies to move in and set up operations quickly instead of having to wait months for one to be built.

A majority of the buildings already under construction in Spartanburg have not yet been leased, but local experts don’t believe that will be the case for long.

And the return for the community could yield investment, jobs, economic diversifcation, tax revenue growth, and other benefts for several years to come.

“A lot of these companies don’t have time to wait,” Britt said. “Now with this drastic [increase in spec space], we expect to see growth. The results are driving these investments. Developers are realizing there’s gold in the hills of Spartanburg County. They’re not prospecting anymore. They’re looking at it with a laser focus.”

Meet the new projects

Who: St. Louis-based CRG, a private real estate investment afliate of Clayco Inc.

What: Multimillion-dollar Inland 85 Logistics Center

Where: 324 acres composed of multiple parcels in the vicinity of Genoble and Robinson roads near Greer

Scope: First phase will be the construction of a 500,280-square-foot spec building that will be expandable to 1,186,680 square feet.

When: Company said the building should be available for occupancy by the fourth quarter of 2018.

Master Plan: A preliminary site plan from the company showed as many as six buildings with the potential to provide an additional 2.3 million square feet of industrial space.

Update: County Council documents discussing incentives for the project said it would be an investment of at least $194 million. On April 12, Clayco announced it established a new ofce in downtown Greenville’s ONE Center at 2 W. Washington St. The company said the move is tied to construction of the spec building.

**********

Who: Atlanta-based Rooker Development What: $30 million Spartan Ridge Logistics Center

Where: 52 acres at 210 Nazareth Church Road near Highway 29 and Interstate 85 near Spartanburg’s west side

Scope: The center will be composed of two Class A spec buildings totaling 559,000 square feet. Building 1 will be 273,000 square feet. Building 2 will be 286,000 square feet.

**********

Who: Columbia-based Red Rock Developments

What: Multimillion-dollar Smith Farms Industrial Park

Where: 475 acres at Highway 101 and Reidville Road near Duncan

Master Plan: Red Rock’s proposed site plan showed the project could yield up to 11 buildings ranging from 60,000 to 1.6 million square feet. Park’s total capacity is nearly 6 million square feet of Class A space.

When: Company expects to deliver both buildings during the frst quarter of 2019.

Update: Red Rock has announced it will construct two spec buildings on the site. The frst building will be 396,073 square feet. The second will be a 210,820-square-foot facility.

**********

Who: A joint venture between PCCP LLC and Panattoni Development Co.

What: Apple Valley Industrial Park

Where: Almost 40 acres at Apple Valley and Boiter roads near Duncan

Scope: Construction includes a 196,000-square-foot spec building and a pre-leased 177,320-square-foot building.

When: Completion expected by mid-2018.

Update: The frst building has been leased to Global Automotive Partners. No lease signed on the second building, according to Panattoni.

**********

Who: Mark Cothran

What: Global Commerce Park

Where: 67 acres at I-85 and Brockman McClimon Road near Greer

Scope: Construction will include a 163,000-square-foot industrial building followed by several multitenant industrial buildings.

Master Plan: The park will be a Class A multibuilding industrial park with up to six buildings that total 600,000 square feet.

When: Completion of frst building expected in summer of 2018.

**********

Who: Charlotte, N.C.-based McDonald Development Co.

What: Carolina Commerce Center

Where: More than 42 acres at 1611 Poplar Drive Extension near Greer and Greenville-Spartanburg International Airport

Scope: Development will include two Class A industrial buildings totaling 458,754 square feet. Building 1 will be 327,137 square

feet. Building 2 will be 131,617 square feet.

When: Both buildings could be delivered during the frst quarter of 2019.

**********

Who: Childress Klein and Cullum Interests

What: Velocity Business Park

Where: 901 Victor Hill Road near Greer

Scope: Development includes a 297,607-square-foot spec building that is nearing completion and could soon be leased.

Master Plan: A preliminary site plan shows the potential for construction of two other buildings at the park, including a 125,000-square-foot building and a 105,000-square-foot building.

When: The frst building was completed at the end of April, but the companies have not said when the other two buildings will be constructed.

**********

Ongoing Projects

Who: Spartanburg-based Johnson Development Associates

What: 363,000-square-foot spec building at Flatwood Industrial Park near Boiling Springs

Where: 767 Flatwood Road

Update: About one year ago, global freight forwarder Senator International leased half of the building, leaving the other half to be occupied by a future tenant. Flatwood Works LLC, an afliate of Spartanburg-based Contec Inc., purchased the building on April 10 for nearly $24 million, property records show.

**********

Who: Illinois-based Becknell Industrial

What: Wingo Park

Where: New Cut Road near North Blackstock Road

Update: BMW supplier Grupo Antolin leased a 175,000-square-foot spec building that Becknell completed at the park early this year. Becknell is moving forward with plans to build another 171,600-square-foot Class A industrial building at the site that is expected to be completed in June. The company has space for another 140,000-square-foot spec building between the two larger facilities.

**********

Who: Philadelphia-based Alliance Partners HSP

What: Hamilton Industrial Park

Where: Fryml Drive off I-85 Business near Boiling Springs

Update: Alliance purchased and renovated two industrial facilities formerly known as Spartanburg’s Viking Warehouses. The facilities offer about 320,000 square feet of spec space. In March, Michigan-based Cooper Standard became the development’s frst tenant when it leased 73,000 square feet.

**********

Who: Indiana-based Scannell Properties

What: Hillside Enterprise Park

Where: 84 acres off Howell Road near Duncan

Update: After attracting several tenants, including Brose North America, Advance Ceramic Coatings, and AFL, to its multibuilding industrial park, Scannell is moving forward with plans to build a fnal 408,000-square-foot spec facility at the site.

**********

Who: Pete Weisman

What: Corporate Center

Where: Corporate Drive off I-85 Business near Boiling Springs

Update: Weisman, the owner and architect of Corporate Center, has continued to expand his multibuilding “flexible” business park. In 2017, Weisman began construction on two additional spec buildings totaling more than 115,000 square feet. When complete, those facilities will bring the park’s existing space to 11 buildings totaling more than 500,000 square feet.

**********

So what’s driving all of the growth?

It never hurts to have the world’s largest BMW plant in your backyard.

BMW Manufacturing Co.’s growth since the Great Recession has set off a chain of new projects and expansions across the county.

For example, German automotive supplier Brose North America celebrated the grand opening this past year of its new $6 million, 77,000-square-foot facility at Scannell’s Hillside Enterprise Park.

Brose makes lightweight door systems and front air gates for several BMW models.

The company was able to utilize Spartanburg Community College’s Spark Center as soft landing space before moving to its permanent home in the spec building at 1171 Howell Road.

Brose’s story is also one of many examples of the team approach that local economic development ofcials have cultivated and used to entice a spate of projects.

And the presence of global brands, including Michelin North America, Toray, Kobelco, Ritrama, Adidas, Amazon, Rite Aid, and others, has solidifed Spartanburg’s reputation as a destination for manufacturing and distribution operations.

“Spartanburg and the Upstate have enjoyed much success,” Britt said. “The results are driving these [spec] investments. … It’s a great sign of the times, and we need to take full advantage of these partnerships we have formed with developers and owners [of these spec projects]. We’re not saying, ‘Build it and they will come.’ We’re saying, ‘Build it and we will help you succeed.’”

One of the biggest game changers, experts said, has been the introduction and continued growth of the South Carolina Ports Authority’s (SCPA) Inland Port Greer in Spartanburg County.

The facility has enabled BMW, Michelin, and other companies to import and export goods via Norfolk Southern Rail to the Port of Charleston and out to waiting markets around the world.

In fact, SCPA recently announced the Inland Port handled 10,612 rail moves in March, bringing its fscal year-to-date volume to 87,360 moves since July, which is a 3 percent increase compared with the same period of the previous year.

That means the facility is on track to break its all-time record of 121,761 rail moves completed in 2017.

In addition, Spartanburg’s inventory of available land capable of accommodating large industrial projects, particularly along highways 101 and 290, continues to fuel activity related to the nearby Inland Port.

Perhaps it’s no surprise that most of the new spec projects are positioned along or near those corridors.

“We are bullish on the Upstate market,” said Tracy White, senior vice president of McDonald Development Co. Carolinas. “Our location in Greer near the BMW plant and the Inland Port is where the majority of leasing is taking place, and the city of Greer has been very accommodating. The number of manufacturing and distribution users planning new or expanded operations in Greer and the greater Upstate market gives us confdence that Carolina Commerce Center will be absorbed during construction and over a short lease-up period.”

What does the future look like?

Brian Young, senior vice president and managing broker with Cushman & Wakefeld | Thalhimer, said the market is “very tight,” with the vacancy for industrial near 5.5 percent.

“It has never been this low,” he said.

During the frst quarter, Young said there were about 2 million square feet of positive absorption, meaning space leased or sold. He expects the market will see additional absorption into the second quarter and an even lower vacancy rate.

“We very much need the new product,” Young said. “Currently, we are tracking about 4 million square feet in users in the market. We have about 3.2 million square feet in speculative space under construction. So we expect a number of these projects to be leased upon delivery.”

Young noted that from 2014 through 2016, available spec space in the market was leased within six months of being delivered, on average.

Garrett Scott, vice president of Colliers International South Carolina, said the Inland Port has been a boon for the Upstate’s spec market.

So much, in fact, he said the facility has even impacted the style of spec buildings being introduced to the market.

For example, there’s a mix of flexible, multipurpose, rear-load buildings and cross-dock buildings, which are perfect for distribution centers, under construction. Many of them are going into the same industrial parks.

“The Inland Port is changing the dynamic of spec in the market,” Scott said. “The strength of the Upstate manufacturing market is also driving this growth.”

He said the next wave of companies moving to Spartanburg could be logistics companies that offer supply chain solutions to specifc companies, such as Amazon or BMW.

While Spartanburg’s spec development is small compared with other large markets, such as Dallas and Atlanta, the county is punching above its weight, Scott said.

He noted that a majority of the developers of Spartanburg’s new class of spec projects are all players in much larger markets.

“Spartanburg County has stepped into the big leagues,” he said. “The money is now chasing performance and yield. The
fundamentals here are strong. It’s the perfect confluence.”