At 3.7%, Lakeland has the third-lowest industrial vacancy rate in the country. A company that was prudent in the recession moves quickly on the opportunities.
Greg Ruthven is on a roll again.
The president of Lakeland-based warehousing titans The Ruthvens is touring his new construction site off Drane Field Road, navigating his Range Rover through mounds of freshly turned dirt.
By October he expects to complete a 131,000-square-foot spec industrial building on the 47-acre site near the Polk Parkway. Shortly after that he plans to start construction on a 116,000-square-foot spec building there.
If the tenants come — and Ruthven, 57, has no doubt they will — he could add yet another spec building by the end of 2016.
The projects are part of a wave of new construction for The Ruthvens, which until recently had not built any new space for nearly six years. But Lakeland is virtually starving for new inventory, and because of his father's foresight, Greg Ruthven will be able to deliver.
“We got ready to build on this site in '08,” Ruthven says of the Drane Field Road property. “I had plans in my hand, we had bank financing, all of the architectural and engineering work was done. Everything was ready. I was walking out the back door and my dad (company founder Joe Ruthven) said, 'Hey son, where are you going ... hang on a minute.'”
The elder Ruthven helped the firm avoid catastrophe as the economy collapsed in Central Florida.
“Had it been me, we would have been blowing in the wind out there. We were just lucky he was there to tell me to stop,” Greg Ruthven says.
Now the centrally located Lakeland area serves as a distribution hub for the state. And with the economy swinging again, big names like Amazon and O'Reilly Auto Parts have been opening massive distribution centers in the region.
Ruthven's firm is now scrambling to add spec buildings to meet demand. The U.S. industrial vacancy rate is at its lowest point in nearly 14 years, and Lakeland has the third-lowest vacancy rate in the country at 3.7%, according to Cushman & Wakefield. “Nobody built anything for a while,” Ruthven says, “and everything stopped for five or six years.”
The Ruthvens, founded in 1957, now controls more than 80 buildings and 3 million square feet of warehouse and industrial space in the Lakeland area. During the recession, the company's vacancy rate reached a record high of 23%, but has since returned to a comfortable norm of 5.5%. And it's falling.
Greg Ruthven says the firm relied on cash reserves during the downturn and avoided asking lenders for concessions. The company also allowed tenants to downsize their space as a way to help retention.
The strategy paid off.
“They might have been on a lease for a longer term, but we downsized with them, and they came back and expanded with us,” Ruthven says. “You can either work with your tenants or you can turn about-face. We worked with them, and they remembered that. I don't know of anybody we worked with that has left us.”
The Ruthvens' recent flurry of construction is already getting results.
Last year the firm spent $1.26 million for a 22-acre property on County Line Road, near the Amazon and O'Reilly sites, and recently finished construction on a 50,400-square-foot multi-use spec building there.
Two tenants have already leased half of the space, and Ruthven predicts the rest will be gone within a couple months. The Ruthvens already have plans to start another 60,000-square-foot spec building this year in the red-hot County Line Road area.
Also, within the next few years, the company and its partners might spend upwards of $30 million on the 47-acre Drane Field Road property alone. But Ruthven says they are mindful of the near miss in 2008.
“Do I hope we can turn the spigot off when it's time to turn it off? Yeah I hope we do, I hope we learned that lesson,” he says. “It'll happen, there will be another bubble. We're trying to be like my father and predict when the next one will be. But right now, the window is open.”
By Kyle Kennedy | Contributing Writer