Developer building large warehouse near CVG: EXCLUSIVE
VanTrust Real Estate LLC, a Kansas City-based real estate development company, is building a nearly 274,000-square-foot warehouse building in Hebron without any signed tenants.
Andy Weeks, vice president and general manager in the Columbus office of VanTrust, said he’s confident the new building will fill up quickly.
“We’re very comfortable building a spec building in this market, given the health of this market,” Weeks told me.
VanTrust is the first group to come into the Cincinnati market since the Great Recession and start a speculative building. Industrial Developments International, which was already active in the Cincinnati market, is also building warehouse facilities in Richwood and Monroe.
VanTrust’s new building, Aviation Distribution Center, will be going up in Airpark International, less than a mile from Interstates 71, 75 and 275. The building, located at 1260 Aviation Blvd., fills one of the last developable sites for bulk warehouse space near Cincinnati/Northern Kentucky International Airport.
Pepper Construction is building the new facility for VanTrust. Site work had started on the property before the recent cold temperatures stopped contractors.
The space is scheduled to be available in June. VanTrust is working with the Colliers International team of Norm Khoury, John Gartner and David Noonan to fill the nearly five-football-field space. The team is marketing the space to companies that need fulfillment or distribution space, as well as light manufacturing users. Aviation Distribution Center’s asking lease rate is $3.95 a square foot, with an estimated 75 cents in operating expense.
“We think we’re hitting the market at the right time,” said Khoury, senior vice president with Colliers.
The vacancy rate for bulk warehouse space near the airport will drop below 3 percent by the end of the first quarter, said Gartner, senior vice president and principal with Colliers. Below 10 percent vacancy is considered healthy, Bill Baumgardner, vice president of development at VanTrust, said. When it drops below 7 percent, rent rates start to increase.
“Rents are being pushed,” Baumgardner said.
VanTrust is bullish in general, with about $400 million worth of projects currently underway nationwide. But the company is particularly bullish on industrial development in the Midwest.
“The industrial market in this entire region is very, very strong right now,” Weeks said.
VanTrust has offices in Columbus, Phoenix, Dallas and Houston. It acquires, develops and provides asset management, construction management and consulting for its clients and capital partners. All of its projects are funded through internal equity.
From the Columbus office, Weeks and his team manage projects in Ohio’s capital, Greater Cincinnati, Indianapolis and Louisville. While this is VanTrust’s first project in the Greater Cincinnati market, Weeks is looking for more opportunities.
“We would love to do more in the Greater Cincinnati area,” Weeks said.
