Smucker Nears Massive Warehouse Deal
JM Smucker Co is planning to occupy a 1M SF distribution center off I-85 south of the city in the Shugart Farms industrial development, numerous sources tell us. It's one reason we're excited to host our 6th Annual Bisnow Atlanta Industrial Real Estate Summit starting at 7:30am, July 9, at the Intercontinental Buckhead.
Red Rock Development, in a JV with DCT Industrial, plans to build the facility for Smucker, which is just across the highway from the food maker's current facility at 1525 Oakley Industrial Blvd. That facility, which Smucker has occupied since 2009 and is owned by DCT Industrial, is nearly 600k SF.
The Smucker facility is the latest deal to spur a new supersized industrial project in Atlanta. This is happening against a backdrop of record absorption and continued strong demand from tenants, according to a recent Colliers International report. After a record 2014, industrial landlords saw 3.7M SF of positive absorption during Q1 '15, the 18th consecutive quarter of positive absorption. That helped push vacancies down by nearly 5%. Among the big deals are Exel Logistics' 800k SF deal at 201 Greenwood Ct (for Bayer HealthCare Pharmaceuticals); Pacific Architects & Engineers at Majestic Airport Center 2 with 471,700 SF; and OfficeMax at Buford Logistics Center for 415k SF, according to Colliers.
And demand has been so good, it's created a dichotomy: There are fewer big blocks of space for mega-tenants to secure, forcing many to go the build-to-suit route, says Pattillo Industrial Real Estate's Larry Callahan, one of our panelists at next week's industrial event. “The demand for space continues to improve,” Larry says. “With the difference being this year, so much has been absorbed, there's less available. And it creates a condition to build, which you're seeing as well.” Indeed, development has been pumping in Atlanta, with in excess of 15M SF of projects currently underway, including: a 1.3M SF Kroger warehouse at Fort Gillem, a 1.2M SF Walmart build-to-suit at Majestic Airport Center IV, Majestic Airport Center IV, a second 1M SF warehouse in the South Atlanta area, and Surya Carpets' 1M SF build-to-suit at Highland 75 in Northwest Atlanta.
Seefried Properties has two spec projects in the works in Atlanta: Satellite North, a 145k SF facility in Gwinnett County in a JV with Crow Family Holdings, and Bluegrass Valley, a 163k SF warehouse off McFarland Road and GA 400 in a JV with Industrial Income Trust. These are among six spec projects Seefried has underway across the country, according to Ferdinand Seefried, who also is a panelist at July 9th's event. “We were focused so much on build-to-suits, but only in the last 12 months, we've been focusing on spec,” Ferdinand tells us. Across the board, supply and demand have seemingly been in balance. But with the swath of spec going up in Atlanta, “that's to be seen,” he says.
Come hear more from Larry, Ferdinand and a host of other industrial experts, including Exeter Property Group's Todd Carter, Duke Realty's Chris Brown, Marcus & Millichap's Bob Johnson and IDI Gazeley's Greg Ryan at the Industrial Real Estate Summit at the Intercontinental Buckhead, 7:30am, Thursday, July 9. Get your tickets here.