Wichita Business Journal
October 26, 2012
Anderson Management Co. has broken ground on an 80,000-square-foot distribution facility in northeast Wichita for an aircraft parts supplier.
B/E Aerospace will lease the building, an expansion from the 49,000 square feet it currently leases from Anderson Management in its Northrock Industrial Park on 34th Street North east of Rock Road.
The build-to-suit project will be Anderson Management’s largest commercial building to date, says Ross Way, property and leasing manager for Anderson.
“It is just one of those deals that doesn’t come along very often,” he says.
The company has owned the land in Greenwich Business Park, northwest of K-96 and Greenwich Road, for about 10 years and tries to keep an inventory of land for deals like this, Way says.
“We always kind of try to look out ahead,” he says.
The largest site Anderson has remaining to build on is about 4 acres at Southwest Boulevard and West Street, enough for a roughly 20,000-square-foot building, he says.
Way says the company will likely look for more land so it can be ready for another deal like the B/E Aerospace project.
Building to be done mid-2013
The project for B/E, on the north side of 26th Street North, just east of FedEx and roughly across 26th from Culligan of Wichita and Professional Sales Services Inc., is expected to be completed in June.
The general contractor is Conco Construction, and the architect is Krehbiel Architecture. Emprise Bank is providing financing.
The project’s cost was not disclosed and no building permit was available yet.
The building will comprise about 68,000 square feet of distribution space and 12,000 square feet of office space, Way says.
B/E has a 15-year lease for the site.
B/E, based in Miami, is the largest distributor in the world of aerospace fasteners and consumables, says Monica Perez-Reinaldo, marketing and communications manager for the company.
The Wichita facility supports local business jet manufacturers, she says.
Way says B/E Aerospace has increased its Wichita space steadily over the years.
Scott Salome, industrial specialist with Grubb & Ellis | Martens Commercial Group LLC, says there hasn’t been a lot of new industrial construction in the metro area.
“We’re lacking in quality industrial space,” Salome says.
He expects there will be more build-to-suit deals as companies looking to expand or relocate find a dearth of quality space available.
Martens, in a forecast this month, says other developers are preparing plans for a variety of building sizes so they can quickly respond to build-to-suit opportunities.
The report puts the total industrial vacancy rate in the Wichita area for all owner-occupied, aircraft campus and leased buildings at 6.6 percent. For tenant-occupied space, vacancy exceeds 20 percent. For northeast and southwest Wichita, the vacancy rates for that space is 15 to 16 percent.
Salome says the overall 6.6 percent rate is healthy. Driving the higher vacancies for leased spaces are older buildings with lower ceilings, lack of land and less desirable configurations and locations, he says.
The city of Wichita recently approved a policy to provide incentives to developers who build speculative industrial buildings of at least 50,000 square feet with at least 28-foot ceilings. The city offers 100 percent tax abatements and sales-tax exemptions on materials bought with industrial revenue bonds used to help finance such a project. So far, one developer plans a 90,000-square-foot project under the policy.
Salome expects more such projects in the new year.
Derby also has approved a spec-building incentive, applicable to buildings of at least 25,000 square feet.
Martens’ forecast says average asking lease rate for new industrial space is about $5 to $6.50 per square foot, depending on things like maintenance and tax inclusions.
Additional building to occur
Anderson Management also plans to build in its Northrock Business Park, at K-96 and Rock Road, adding an 18,000-square-foot building next spring, Way says. The company is finalizing a lease for a 16,000-square-foot building it completed there in May, giving the park about 275,000 square feet of total space in 17 buildings.
Like that park, Greenwich Business Park also is very attractive, he says.
“That will be a good location for many years to come,” Way says.
Activity will pick up in the area when GoodSports Enterprises LLC’s project kicks off on the northeast corner of K-96 and Greenwich. The company plans a 55,000-square-foot multisport athletic complex at the site, all to be complemented by a hotel and retail.