Industrial Developments International Inc. is in the midst of adding one build-to-suit and two speculative buildings in its Crossroads Distribution Center in Olive Branch – marking the area’s first spec construction since 2008.
Atlanta-based IDI plans to build two separate buildings in the master-planned, 475-acre business park the firm acquired in 2005, said Tim Moore, IDI vice president of leasing for the Memphis office.
“This is one of the markets of many that we’re starting spec building in across the country, so we’re hoping to hit this economic recovery when it really comes into full swing later in the year,” Moore said. “We’re really excited.”
The first is Building B, which will be 267,843 square feet and divisible for users down to 50,000 square feet. Building B will be available in September, Moore said.
The second of the two spec spaces in the state-of-the-art industrial complex is Building G, which will total 869,892 square feet and will be divisible down to approximately 400,000 square feet. Building G will be available “shortly thereafter” Building B, Moore said.
The park can accommodate about 7 million square feet when it’s totally developed.
“Even though we’re only beginning to see positive ... signals, the inventory is so low, and the activity level right now is so high that the market really needs this kind of space.”
–Tim Moore, IDI vice president of leasing for Memphis office
Recent noteworthy deals in Crossroads Distribution Center in the last 18 months include General Electric International Inc.’s 212,880-square-foot lease in Building A, Anda Distribution’s 234,000-square-foot build-to-suit facility and Soladigm Inc.’s 296,204-square-foot deal in Building F.
But none of those were speculative and every space was less than 300,000 square feet.
“We’ve had none since 2008,” Moore said. “We were actually the last ones to build a spec building, and that’s Crossroads A, which is the building GE went in last year. So between the time that we finished that building and now, there’s been no new product added and a lot of leasing activity and absorption, particularly in the bulk category.”
Moore said IDI’s development is the combination of high demand and good leasing activity over the past couple of years.
“Even though we’re only beginning to see positive, macro economic signals, the inventory is so low, and the activity level right now is so high that the market really needs this kind of space,” Moore said. “We’ve got to deal with competition in the best of markets, and right now, the competition level is such that we really see where spec products would be good for the market.”
IDI’s speculative construction not only helps the industrial sector on its on capitalization and rental rates, but it “really drives positive activity toward us,” said Colliers International’s Andy Cates at his address to the Memphis Rotary Club Tuesday, Feb. 28.
“They’re putting their money where their mouth is and they’re betting on us,” Cates said. “I think people around the country will start saying, ‘Look what’s happening in Memphis; it must be strong to have speculative construction there.’
Meanwhile, IDI is in the initial phases of building its fourth building in Crossroads Distribution Center. It will accommodate about 600,000 square feet of space for Brookfield, Wis.-based Milwaukee Electrical Tool Corp.
IDI provided no comment on the Milwaukee deal.