The rebranded Elion Logistics Park 55 has the potential to house more than 30 million square feet of distribution space.
WILMINGTON, IL—Elion Partners reports that it plans to spend approximately $2 billion to expand the former RidgePort Logistics Center here. The Miami-based real estate investment firm plans an additional 30 million square feet of distribution space at what is now being called the Elion Logistics Park 55.
As part of its new plan for the property that it acquired in 2016, Elion has retained commercial brokerage firm CBRE as the exclusive leasing agent for the 140-acre complex that Elion says will serve an underserved trucker and warehouse workforce.
Upon completion, the park will be the largest rail-served industrial mixed-use logistics park in the Midwest, and one of the largest in the country.
“ELP 55’s goal is to develop a mixed-use logistics park that aligns with the values of the local community, as the logistics industry continues to change. We recognize the ever-increasing demands of consumers and are proud to continue development of one of the most expedient ‘first-mile’ logistics centers in the country,” says Shlomo Khoudari, co-founder and managing partner at Elion Partners.
In 2016, Elion acquired more than 1,000 acres of land in the Greater Chicago area with the potential to house 11,397,057 square feet of industrial distribution space, known as RidgePort Logistics Center. At the time, a 2-million-square foot facility owned by Michelin and a 50,000 square foot trans-load cooler building owned by Puris were the only tenants on-site.
Since that acquisition, Elion has purchased additional land, made significant infrastructure advancements and collaborated with local partners and government entities to expand the future park to more than 30 million square feet. To date, 6.3 million square feet of multi-tenant and build-to-suit space exists and is occupied by companies such as Post, Lineage, Batory Foods, and another Fortune 500 company.
The master plan includes up to 2,500 acres and currently houses a full-service TA Petro Travel Plaza, 40 acres of natural ponds, and up to 140 acres planned for commercial development. Current projects underway include an on-site first responders’ station, slated for completion in the fourth quarter of this year, interconnectivity via planned pedestrian walking paths, and an on-site helipad. ELP 55 features two miles of frontage along the BNSF’s Transcontinental Mainline with up to 12 million square feet of potential rail service, and three miles of I-55 frontage with a complete interchange.
In addition to an approximately $2.5 billion in projected economic growth to the region and a potential 12,655 additional local jobs to residents, the park also offers closer proximity to these companies’ consumers due to e-commerce-driven demand for quicker delivery. ELP 55 is located in a regional distribution hub that reaches 27% of the US population within a one-day drive.
Among the planned facilities include showers, laundry, vehicle service, business services, restaurants and entertainment. In addition, Elion Logistics Park 55 will feature 40 acres of natural ponds.
CBRE senior vice presidents Jeff Kapcheck and Jason will represent Elion in leasing the park.
“This is one of the premier industrial opportunities in the region, with access to both rail and a major interstate,” CBRE’s Kapcheck says. “We are confident it will be attractive to national and international distribution firms that need to improve their logistics supply chain.”
The Chicago industrial market has been on a historic run, as 2018 closed with the 34th consecutive quarter of positive absorption and total annual absorption at 19.9 million square feet. The majority of users have been distribution and logistics providers. With active users looking for 22.1 million square feet, supply is not meeting current demand, CBRE states.
“We have seen an unprecedented amount of activity in Chicago’s distribution and logistics market in recent years and users continue to look to expand,” Kapcheck notes. “We expect this activity to continue for the foreseeable future and few locations will provide opportunity similar to ELP 55.”
Cargo volumes declined at the Port of Long Beach in May. After several months of growth, cargo volumes fell 16.6% in May year-over-year. May 2018 was a record-breaking month for the port. However, cargo volumes are now down 6% for the year.
In May, the port moved a total of 573,623 twenty-foot equivalent units. Imports decreased 19.5% to 290,568 TEUs, and exports declined 15.3% to 120,577 TEUs, while empty containers sent overseas dipped 11.7% to 162,479 TEUs.
Mario Cordero, executive director at the Port of Long Beach, said that several factors contributed to the drop, including the impact of international trade.
Steelcase’s new facility spans approximately 618,000 square feet at 1050/1150 Luna Rd.
CARROLLTON, TX—As e-commerce continues to get more ubiquitous in Americans’ daily lives, manufacturing and last-mile logistics dig in for positions of growth. To that end, office/medical office/education furniture manufacturer Steelcase Inc., valued at $3-plus billion, recently acquired Plano-based Smith System Manufacturing Co.
Following this announcement, the firm leased a new spec mega-manufacturing building in the DFW metro. The facility is located at 1050 and 1150 Luna Rd. in Carrollton and spans approximately 618,000 square feet. Steelcase is expected to begin occupying the space this summer.
“Our company has been on a growth trajectory, and the location, along with the building’s features, was the perfect choice as we made this acquisition,” said Allan Smith, vice president of global marketing at Steelcase.
NAI Robert Lynn’s president Mark Miller and executive vice president Dave Peterson partnered with Arie Saloman from NAI Puget Sound to arrange the lease.
“The customized building enables Steelcase to expand its capabilities and support manufacturing growth for years to come,” said Miller. “I’m optimistic about the manufacturing outlook in Dallas/Fort Worth. Steelcase is in a great location for success.”
Steelcase’s new warehouse offers the company a variety of building features including a large loading dock for shipping and receiving with 32- to 36-foot clear-height and access to several major highways and Belt Line Road. Additionally, the community attracts a large labor workforce and Steelcase plans to hire approximately 400 seasonal employees this year.
“By working with the developer prior to construction, we were able to address specific requirements that would be necessary for our client to meet their manufacturing needs,” Peterson tells GlobeSt.com. “The location of the buildings, access to employment and major highways were significant factors in choosing this site.”
E-commerce and last mile logistics tenants continue to fuel a massive industrial space expansion throughout the country, with 272 million square feet of construction completed across 46 markets during the last 12 months. According to Avison Young’s spring 2019 global industrial market report, there is another 274 million square feet in the pipeline as developers seek to satisfy demand for new space with proximity to transportation networks and large population pools.
The industrial market in Dallas-Fort Worth benefits from a centralized location and strong transportation/logistics infrastructure. Dallas topped two key categories in the report, which analyzed activity from second quarter 2018 through first quarter 2019.
The venerable industrial market led the top five lists for space under construction (30.9 million square feet) and absorption (23.4 million square feet). It ranked second for construction completions during the 12-month period with 29.4 million square feet, behind Los Angeles at 39.3 million square feet.
“Dallas-Fort Worth is one of the healthiest industrial markets in the country, with more than 30 million square feet under construction, a consistently low vacancy rate, increasing rental rates and stable investment activity,” said Mike McElwee, a principal in Avison Young’s Dallas office. “This activity is the culmination of multiple years of significant business and population growth, and the region’s comparatively lower cost of living and doing business.”
Among the companies recently committing to large blocks of space in the market are Home Depot, Ashley Furniture and Living Spaces. Home Depot has announced plans to open a multimillion dollar distribution facility in DFW.
CBRE predicts that much of the growth in the cold storage sector will occur in gateway markets like Los Angeles and the New York area, as well as leading food-production states such as Pennsylvania.
PHILADELPHIA—The continued growth in online grocery sales is one factor that prompts CBRE to predict demand for up to 100 million square feet of cold storage space in the US over the next five years.
In a newly released report, CBRE ranks Pennsylvania, and specifically the Lehigh Valley as the sixth largest cold storage market in the country with 213.5 million square feet of inventory.
The state of New Jersey came in at number 10 with an inventory of 136.7 million square feet.
“With the strategic location of Eastern Pennsylvania to major US consumer markets, we expect demand for cold storage space to continue to increase,” says CBRE’s William Wolf, EVP, who is based in Allentown, PA.
A recent report from the Food Marketing Institute and Nielsen projects that groceries ordered online will account for 13% of total grocery sales by 2022, up from 3% in 2018. Such growth would amount to an additional $100 billion in annual grocery sales conducted online, CBRE states.
This outlook would result in significant changes for the industrial cold-storage industry, which at 3.6 billion cubic feet (an estimated 214 million square feet) currently accounts for a tiny portion of US industrial-and-logistics real estate overall. Much of the cold-storage sector’s growth is likely to occur in gateway markets like Los Angeles and the New York area, as well as leading food-production states such as Pennsylvania, the report notes.
“Several factors have combined to fuel expansion of the cold-storage space, from consumers’ increasing use of online ordering for groceries to grocers’ investment in new delivery strategies and warehouse technologies,” says Adam Mullen, CBRE’s Industrial & Logistics leader in the Americas and market leader for greater Philadelphia. “Still, the sector’s growth will be somewhat measured because these are specialized facilities requiring significant capital, power and government approvals.”
California came in at number one for leased cold storage space in the US at 396.5 million square feet, followed by: Washington at 271.3 million square feet; Florida at 259.4 million square feet; Texas at 231.4 million square feet; Wisconsin at 228.1 million square feet; Illinois at number 7 at 188 million square feet; Georgia 183.5 million square feet and Oregon at 139.6 million square feet.
While CBRE is predicting strong growth for the cold storage sector, it notes in the report that the challenges of constructing and modernizing cold-storage facilities to keep up with the strong growth of online grocery sales has driven consolidation in the industry as firms seek to gain economies of scale. Four companies control 73.4% of the refrigerated warehouse space in North America.
Lineage Logistics is the leader, accounting for 31.8% of the cold-storage market with more than 1.1 billion cubic feet of space in the US and Canada. Americold takes up 29% with 1 billion cubic feet. Other key players include United States Cold Storage (8.9%) and VersaCold Logistics (3.8%), both having a combined 444 million cubic feet of refrigerated warehouse space in the U.S.
In preparation for our Women of Influence special feature and retreat, Real Estate Forum and GlobeSt.com together is putting a spotlight on the achievements of women in commercial real estate. This year, we collected nominations across a number of fields, with the awards to be presented at our inaugural GlobeSt.ELITE Women of Influence Conference and this year’s amount of entries, was our biggest yet.
The field of consultant and advisor was open to professionals who work in a consultant or advisory capacity to commercial real estate companies as it relates to such services as accounting, appraisal and valuation; portfolio, occupier or workplace strategy; site selection and economic analysis; entitlement, zoning and urban /land use planning; engineering feasibility studies; etc.
Since 1983, Forum’s Women of Influence has recognized remarkable commercial real estate professionals who have significantly influenced the market or had outstanding successes in the past year. It is in that spirit that we’re launching our first-ever Women of Influence Conference will celebrate the women who drive the commercial real estate industry forward.
At this year’s event, we will honor the winners at the event July 10-11th in Broomfield, CO, at a special awards ceremony cocktail reception and gala dinner. The inaugural GlobeSt.ELITE Women of Influence Conference celebrates the women who drive the commercial real estate industry forward. In panel discussions throughout the event, these influential leaders will discuss the critical issues facing CRE now and in the future, what it means to be a woman in business today and CRE’s place in the #MeToo era. They will discuss what they are doing to promote diversity in the upper levels of management and what the industry can do to position itself for a more inclusive future.
The top women in the category of consultant and advisor professional chosen this year are as follows:
Cate Agnew, Natixis CIB
Georgia Collins, CBRE’s Host Team
Jennifer Epstein, Kastle Systems
Julie Kilpatrick, University of California San Diego
Elizabeth Krol, Partner Engineering and Science Inc.
Julie Melander, The Counselors of Real Estate
Dina Miller, Miller Samuel Inc.
Debra J. Moritz, Cushman & Wakefield
Kim Moore, Newmark Knight Frank
Tamar Moy, Newmark Knight Frank
Nancy H. Mozzachio, Sine Qua Non RE Advisors-MAXIMIZING
Sherri S. Parman, Capstan Advisors
Marie Phillips, The Instant Group
Karla M. Smith, P.G., AEI Consultants
Kathleen B Treat, EBI Consulting
Jana Turner, RETS Associates
As always, our seasoned editorial team was seeking the best of the best across the commercial real estate spectrum. In evaluating the entries, we took into account a number of factors, including: the nominee’s impact on, and reputation within, her firm and broader professional community; the nominee’s professional career highlights, from dealmaking savvy and innovation to client satisfaction and personal growth; a proven ability to achieve goals and display ingenuity in terms of creative thinking and problem solving; her dedication to furthering the development of her field and the role of women within it; accomplishments and involvement in her company, the CRE industry and broader social community; a personal commitment to the highest ethical standards, service and excellence; and so much more.
Keep checking GlobeSt.com for more winners from other categories (release dates below) and be sure to keep an eye out for the July/August issue of Real Estate Forum, which will further highlight these individual’s accomplishments.
June 12-Innovator category
June 13-mentor category
June 14-ally category
June 14-Humanitarian category
June 18-all category winners revealed
➤➤ Join the GlobeSt.com Women of Influence 2019 conference July 10th and 11th in Broomfield, CO, which celebrates the women who drive the commercial real estate industry forward. The event will address the critical role of women in the CRE business. Click here to register and view the agenda.
TAMPA, FL—Many investors who used to focus on more than one industry are progressively zeroing in on the industrial market, choosing to increase their position in industrial real estate or even commit to it exclusively. Driving these new players in the market is the strong long-term outlook for an unrelenting e-commerce shift in the supply chain.
John Dunphy, EVP at JLL believes the industrial real estate market has significantly changed over the years—and will likely continue to do so rapidly. The global e-commerce logistics market is expected to register a compound annual growth rate of more than 20% from 2016-2022. With demand for industrial real estate showing no signs of abating soon, more investors than ever are eyeing direct-to-consumer businesses and those related to it for long-term investments.
In Tampa specifically, this has resulted in development being hyper focused around Florida’s major East-West I-4 corridor. The location empowers companies’ regional distribution by granting access to 20 million people within a 5-hour drive time and also by providing last-mile delivery opportunity for Tampa and Orlando, both of which are accessible within an hour.
GlobeSt.com sat down with Dunphy to hear more about these trends. This is what he had to say.
Will new-to-industrial investors help increase the flexibility of deal structures?
The gamut of mouths looking to take a bite out of the market will likely fuel a competition for space and introduce a plurality of investing goals to the market. For example, new investors may drive more or less interest in long- or short-term returns. This enhanced investor diversity—in both aims and business practices—may make it harder for any one group to dominate. In order to capture a deal, players may need to be a lot more flexible in how they do it. Sure, the prevailing Blackstone and Prologis types are expected to remain powerhouses, but will they be able to as assertively dictate deal terms? We’ll have to wait and see.
Is the escalating interest in Tampa’s industrial market likely to continue to drive new product development?
From Polk County to Pinellas County, more people than ever are looking to build in Tampa, as evidenced by the tremendous amount of spec development going on today. Currently, over 5 million square feet of industrial space is under construction along the I-4 corridor. This figure represents 12 unique developers who are working on projects ranging from 100,000 to 1 million square feet. But unlike in previous years, fewer developers are repeat players. In order to maximize opportunities and help guard against a downturn, new entrants should partner with expert real estate advisors who have experienced both good and bad market cycles.
With more investors on the hunt for deals, will more targets shift to the urban core?
Whether it’s by tearing down parts of a building to create more parking spaces, raising roofs, or converting metal construction to block, companies are increasingly rehabbing buildings in the urban core. And if as projected Tampa’s urban population (and people’s online buying habits) continue to increase, so too would demand for downtown spaces that service last-mile deliveries. With that, more investors are likely to continue eyeing the city, making it increasingly important to monitor how increased interest in the core will affect Tampa’s market.