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Commercial Real Estate
Business Observer Friday, Dec. 6, 2019 7 months ago

Seeing Red

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Red Rock Developments of South Carolina is bringing its experience developing industrial spec projects in Atlanta and elsewhere to the Interstate 4 corridor
by: Kevin McQuaid Commercial Real Estate Editor

Bolstered by low overall vacancy and what it believes will be long-term occupier demand, a South Carolina-based developer intends this month to begin construction on a $35 million distribution center in Plant City.

Red Rock Developments, of Columbia, S.C., plans to build its County Line Distribution Center three miles from Interstate 4 on a speculative basis, company officials say.

Red Rock officials and its partners — Lakeland-based Aspyre Properties and Wharton Industrial, of New York — expect to deliver the 510,272-square-foot project during the latter half of next year.

“Florida is experiencing tremendous population growth, and at the same time, consumer sentiment is changing,” says John T. Barker Jr., Red Rock’s president and chief development officer.

“Consumers want goods faster than ever. That’s what’s led to a new set of industrial properties of 500,000 square feet and above. Five years ago, there weren’t a lot of those as there are today.”

Barker adds that the decision to go forward on a speculative basis also is a calculated one, based on Central Florida’s population growth — more than 18 million people live within a five-hour drive of the property — and tenants’ need to often occupy spaces quickly.

“A lot of tenants don’t have time to do a build-to-suit project, that’s not at all uncommon in major metro markets from Atlanta to Orlando,” Barker says. “Entitling a piece of property takes energy and effort, there are considerations regarding water, soil, transportation and traffic.

“We understand leasing, and as such, feel we’re taking the right approach in Florida.”

In its 15-year history, Red Rock has developed more than 18 million square feet of space in markets that include Atlanta, Greenville, Spartanburg and Columbia, S.C.

The company’s Plant City project, on 36.4 acres, will feature 36-foot-clear ceiling heights, super-flat floors, ESFR fire suppression systems, cross-dock loading, a 200-foot truck court, substantial truck and other vehicle parking.

Perhaps most importantly, the project will be built less than three miles south of Interstate 4 on County Line Road, and less than two miles from Lakeland Linder International Airport, where online shopping behemoth Amazon is planning an air distribution hub.

The company is seeking rental rates of $5.25 per square foot, says Leah Bailey, a Red Rock leasing representative.

Red Rock’s Plant City project — along with a 617,000-square-foot distribution center the company intends to deliver early next year in Ocala — comes against a historically low vacancy rate for industrial properties in the Interstate 4 corridor.

At present, only 4.4% of all industrial space in the Tampa to Orlando corridor are available for lease, and large blocks of contiguous space containing modern logistics features are increasingly difficult to find.

Red Rock’s plan for Plant City also comes as occupiers from Home Depot to Amazon are expanding their industrial and distribution space in the region, which already boasts logistics hubs operated by Publix Super Markets Inc., O’Reilly Auto Parts, Southern Wine & Spirits, DHL/Ikea, Amazon, Walmart and others.

“Those projects validate our location,” Barker says. “And anytime Amazon puts up a new building, or occupies one, it’s a tell-take sign that the consumption rate in the area is increasing.”

At the same time, though, developers ranging from Central Florida Development to McCraney Property Co. and Prologis to Duke Realty are pursuing or have proposed new industrial projects within the Interstate 4 corridor, which will compete directly with Red Rock.

In McCraney’s case, its $80 million County Line Logistics Center at Fancy Farms project — slated to contain four buildings totaling 1.34 million square feet on 70 acres, also in Plant City — is one of only a select few sites capable of accommodating users seeking more than 1 million square feet of distribution space.

To gain an edge, Red Rock is planning a series of added features intended to differentiate its project. Barker says the company intends to insulate its dock doors in the event tenants want to air condition their space, and it will also widen “speed bays,” indoor painting and specialized curbs.

“There are a number of cutting-edge idea that have come out of Atlanta that we’ve come across, and we’ll be bringing them here to Central Florida,” Barker says.

Jan Boltres, executive managing director of industrial services with commercial real estate brokerage Colliers International, says Red Rock’s designs are progressive and innovative.

“They’re doing things now to anticipate the needs of future distribution companies,” says Boltres. “And they want to be the premier developer in this market, by building product that is top of market with amenities that will be the gold standard. They have no intention of building things cheap, selling and getting out.”

 

 

 

 

 

 

 

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