Walbridge fills up one Lyon Township warehouse building, starts another
With a German auto supplier up and running in Detroit-based Walbridge Group’s new warehouse building in Lyon Township, the construction giant has started putting up another on spec.
Webasto Roof Systems Inc. has leased the 280,000-square-foot Lyon Distribution Center I building off I-96 at Grand River Avenue and South Hill Road and John Rakolta III, president of Walbridge Group, said Lyon Distribution Center II is currently under construction with 150,000 square feet of speculative building space to be complete in 12 months.
“We just got our (Michigan Department of Environment, Great Lakes, and Energy) permit to start moving dirt,” he said of the approximately 20-acre site, only a portion of which is developable due to wetlands.
Walbridge owns the 515-acre property encompassing both sites and has for more than three decades.
Marketing materials from earlier this year by Southfield-based Signature Associates Inc., which handled the Webasto lease for both the supplier and Walbridge, say that the Lyon Distribution Center I building was expected to lease for $7.25 per square foot per year, not including utilities. At that rate, Webasto’s annual lease would total $2.03 million, or $169,167 per month, minus utilities.
“They’re a good company with a lot of growth,” Rakolta III said of Webasto. “They have a ton of new part contracts with Ford and other suppliers so they needed another manufacturing facility, and ultimately felt Lyon Township could meet their timeline.”
Webasto has not answered emailed questions sent to the company Tuesday afternoon.
Walbridge’s strategy for the 515-acre site has shifted over the years since it acquired the property in 1984 when it bought another construction company.
In 2013, the land was put up for sale for $33.5 million but it never traded hands. It was also listed in 2006.
The addition of another spec building there should come as little surprise.
According to a third-quarter industrial market report from the local office of New York City-based brokerage firm Newmark Knight Frank, there is 7.6 million square feet of new space under construction, up from 6.7 million square feet in the second quarter and 5.1 million square feet in the third quarter 2020.
Of that 7.6 million square feet under construction, 86 percent, or 6.6 million square feet, is bulk warehouse and distribution space. The region has some 142.9 million square feet of warehouse and distribution space with a total vacancy rate of just 3.7 percent and asking rents of $5.22 per square foot per year.
The tight market has led to an influx of new spec construction, meaning that developers start building them without a tenant lined up.
Among the projects: Kansas City-based Flint Development is working on building 2.3 million square feet of speculative space at the former Ford Motor Co. Wixom plant site as well as on about 45 acres in Pontiac on land owned by defense contractor Williams International Co. LLC.
And another developer, Riverside, Mo.-based NorthPoint Development LLC, has torn down the former Cadillac Stamping Plant in Detroit to erect a 682,000-square-foot building in its place, with about two-thirds of that going to Southfield-based Lear Corp. NorthPoint is also working on plans for the Eastland Center shopping mall property in Harper Woods, the General Motors Co. Warren Transmission Plant and land in Shelby Township, among others.
The developer also had eyed the Packard Plant property in Detroit, but the Detroit Free Press reported earlier this month that potential deal collapsed.
Detroit-based Sterling Group and Texas-based Hillwood Enterprises LP are also attempting to build another 450,000 square feet of distribution space for Home Depot on the former Pinnacle Race Course site in Huron Township, which would add to the 1.27 million square feet across two buildings already built on the property for Amazon.com Inc.
Posted By: Crain’s Detroit Business on October 27, 2021. For more information, please click here to read the source article.
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