Tag Archive for: distribution
Incentives, industrial leasing strategy start paying off for Hunt Midwest
Rob Roberts – Kansas City Business Journal
Hunt Midwest officials are crediting incentives and a focus on smaller industrial tenants for strong leasing activity at the company’s Logistics I and II buildings in the Hunt Midwest Business Center, a 2,500-acre development at Interstate 435 and Parvin Road in Kansas City.
The following new HMBC tenants recently qualified for 25-year, 100 percent property tax abatements through an Enhanced Enterprise Zone that the business center is located within:
- American Tire Distributors Inc. opened a 108,860-square-foot regional warehouse and distribution center in HMBC Logistics II, a 200,000-square-foot, multitenant warehouse and distribution facility.
- Orbis Corp. opened a 40,777-square-foot service center for its Reusable Packaging Management division in HMBC Logistics II. The service center focuses on inventory management and cleaning of plastic reusable packaging used in the food, beverage and consumer goods supply chain.
- Spartan Motors Inc. expanded its cargo van and fleet upfit assembly operation in HMBC Logistics I to 63,169 square feet. The expansion comes less than a year after Spartan launched its all-new service line in HMBC Logistics I, which also is a 200,000-square-foot warehouse and distribution facility.
- A leading supplier to the e-commerce industry will launch a 37,888-square-foot manufacturing and fulfillment center in April at HMBC Logistics I, its first Midwest location.
“These leases validate Hunt Midwest’s decision to invest in multitenant facilities geared to tenants ranging from 40,000 square feet to over 100,000 square feet,” Hunt Midwest CEO Ora Reynolds said in a release. “Phase 5 of the Hunt Midwest Business Center includes a third 200,000-square-foot multitenant building along with room for additional buildings ranging from 450,000 to 1.2 million square feet. As businesses grow, we will have the inventory to meet their growing demands within HMBC.”
The abatements for qualified companies available through the Enhanced Enterprise Zone are based on investment and job creation.
“The EEZ is a game-changer for companies looking to locate in HMBC,” Mike Bell, Hunt Midwest’s vice president of commercial real estate, said in the release. “With the tax incentives offered, companies are benefiting greatly from substantial savings.”
With immediate proximity to FedEx and UPS hubs and a location that’s minutes from interstates 35, 29 and 70, HMBC also offers companies the ability to reach 85 percent of the U.S. market within two days while benefiting from one of the Midwest’s strongest labor pools.
“Hunt Midwest offers what we term the ‘three Ls’ of industrial real estate: location, logistics and labor,” Bell said in the release. “We are seeing a cluster effect of automotive, 3PL and e-commerce companies taking advantage of HMBC’s central location, strong workforce and direct access to public transportation.”
HMBC ultimately will include an additional 8 million square feet of master-planned, Class A warehouse and distribution space in future phases.
Serving as Hunt Midwest’s partner in the development is HSA Commercial Real Estate, a full-service firm specializing in office, industrial, retail and health care real estate leasing, management, marketing, development and financing. Besides developing and acquiring more than 50 million square feet of commercial real estate nationwide with a total value in excess of $2.5 billion, HSA Commercial Real Estate has represented owners and tenants in more than 10,000 transactions and manages a property portfolio in excess of 16 million square feet.
Another firm wheels into Hunt Midwest’s Automotive Alley
Rob Roberts – Kansas City Business Journal
Hunt Midwest has landed its 14th auto industry-related tenant at Automotive Alley, a combination of above- and below-ground real estate near the junction of Missouri Highway 210 and Interstate 435 in Kansas City.
Dejana Truck & Utility Equipment, a New York-based subsidiary of Douglas Dynamics Inc. (NYSE: PLOW), has leased 90,000 square feet in SubTropolis for a new Ford Transit and Ford F-150 upfitting operation. The firm also will lease an additional 2 acres for vehicle staging, Hunt Midwest reported.
Hunt Midwest’s Automotive Alley includes space in SubTropolis, the world’s largest subterranean business complex, and the roughly 700-acre Hunt Midwest Business Center surface development above it.
“Dejana is the 14th auto company to choose Automotive Alley for upfitting, distribution or coordination operations in the past six years,” Mike Bell, Hunt Midwest vice president of commercial development, said in a release. “This cluster effect of automotive companies located within SubTropolis and the Hunt Midwest Business Center allows companies like Dejana to be more productive and cost competitive, which is the essence of Automotive Alley.”
Dejana manufactures van partitions, racking systems and hauling systems for after-market installation on commercial vans and trucks. The company chose SubTropolis because of its location just south of Ford’s Kansas City Assembly Plant in Claycomo and the availability of space for staging vehicles before delivery, Andrew Dejana, president of Dejana Truck & Utility Equipment, said in a release.
“Being able to quickly move vehicles from Ford’s plant to our upfitting operation, combined with the ability to stage those vehicles nearby, is an unbeatable value proposition in our business,” Dejana said in the release. “SubTropolis was the logical choice for Dejana as we work to expand our reach and improve our ability to serve customers in the energy, utility and telecommunications industries. We look forward to continuing the great partnership we have with Ford, and a presence in the Kansas City market will strengthen our position with the fleet and ship-through business.”
Additional upfitters and suppliers with locations in Automotive Alley include AER Manufacturing, Adrian Steel, Auto Truck Group, Clore Automotive, Ground Effects, Grupo Antolin, Knapheide Manufacturing Co., Masterack LLC, CVP Group LLC, Midway Ford, Reading Truck Body LLC, Spartan Motors and XPO Logistics. Those companies, combined with Ford’s North American Vehicle Logistics Outbound Shipping facility, have more than 10,000 spaces for vehicle staging in Automotive Alley.
SubTropolis emerges as leading logistics location for animal health industry
Krista Klaus – MetroWire Media
Hunt Midwest SubTropolis is carving out a niche in the animal health logistics space, growing its veterinary industry footprint to 250,000 square feet. Over the past 12 months, three animal health companies – French veterinary pharmaceutical company Virbac, Ceva Animal Health, and IodiTech – have announced new or expanded warehouse and distribution operations in SubTropolis, which offers commissioned facilities in a naturally cool underground environment.
“SubTropolis is the total package for animal health companies and their unique requirements for product safety and climate control, providing significant operational cost efficiencies,” said Hunt Midwest President and CEO Ora Reynolds.
Virbac is currently consolidating its North American product warehousing and distribution operations in the underground business complex. According to Virbac President and CEO Paul R. Hays, the SubTropolis location will help the 8th largest veterinary pharmaceutical company better align itself within the Kansas City Animal Health Corridor, which churns out more than half of the sales generated by the global animal health industry.
“By bringing processes and people together at this Kansas City facility, we are boosting collaboration and efficiency within our manufacturing operations,” Hays said.
In addition, Ceva Animal Health and IodiTech Inc. both announced expansions in the Energy Star rated facility over the past year. Hunt Midwest Vice President Mike Bell attributes SubTropolis’ success in the animal health space to a “compelling value proposition” for companies that must adhere to industry product standards by maintaining strict temperature and humidity levels.
“The underground’s protective layer of limestone essentially offers ‘natural’ cooling that saves companies between 70 and 80 percent on utilities and equipment compared to a building on the surface,” Bell said. “There’s an ‘Aha Moment’ when companies fully realize how a SubTropolis location can substantially improve their bottom line.”
Ceva Animal Health is a case in point. CEO Craig Wallace says that consistent conditions and the ability to easily expand underground were two key reasons Ceva chose SubTropolis for a new North American warehouse and distribution center in 2015. Within a year, Ceva had outgrown its space and was able to quickly scale up to meet ongoing demand.
“The underground location is a great solution for Ceva’s current and future warehousing needs,” Wallace said. “As we add products and expand into new categories, we require scalable space and partners like Hunt Midwest who can accommodate our growth and evolve with us.”
Kansas City-based IodiTech Inc. opened a distribution operation in SubTropolis in 2016. The company manufactures and ships a variety of iodine derivatives – including animal feed minerals – throughout North America and the world.
“The ability to ship to up to 85 percent of the U.S. within two days was of critical importance,” IodiTech President Curtis Thomas said. “Our location in SubTropolis is the perfect complement to our nearby manufacturing facility.”
The growing collection of animal health assets within SubTropolis is creating an “industry cluster within a cluster” for Kansas City’s Animal Health Corridor, which will hold its annual Animal Health Investor Forum and Animal Health Homecoming Dinner August 28-29.
“Hunt Midwest SubTropolis is a valued strategic partner as we work on behalf of the Kansas City Area Development Council to attract global animal health companies to the Greater Kansas City region,” said Kimberly Young, president of the KC Animal Health Corridor.
Virbac Corporation Selects KC Animal Health Corridor for North American Distribution Center
Company consolidating distribution operations in Hunt Midwest SubTropolis for central location, flexibility
Ashlie Hand – Kansas City Area Development Council
Company consolidating distribution operations in Hunt Midwest SubTropolis for central location, flexibility
Virbac Corporation, one of the largest independent veterinary pharmaceutical companies in the world, announced today that it will consolidate its North American product warehousing and distribution in the KC Animal Health Corridor. The company will locate in an approximately 150,000-sq.-ft. facility in Hunt Midwest SubTropolis in Kansas City, Missouri.
“By bringing processes and people together at this Kansas City facility, we will be able to boost collaboration and efficiency within our manufacturing operations. By choosing this Midwest location, we’re better aligning ourselves within the animal health industry, and we’re excited to continue building a strong partnership with the KC Animal Health Corridor,” said Paul R. Hays, president & CEO, Virbac Corporation.
Virbac selected Hunt Midwest SubTropolis due to its central location, transportation access, and unique underground environment. SubTropolis offers operational cost savings with its constant temperatures that meets the climate-controlled requirements critical to Virbac’s business.
“The SubTropolis location presents an exciting opportunity for Virbac Corporation; it will allow us to be more responsive than ever and therefore provide better service to our customers, while also being able to accommodate the expected growth in our product lines,” said Michael Albo, vice president communications & customer service, Virbac Corporation.
The company expects to occupy its new facility in April and be fully operational before the end of the year.
“Virbac represents one of the most respected names in the global animal health industry and we are honored to grow its presence in the KC Animal Health Corridor,” said Kimberly Young, president of the KC Animal Health Corridor.
“The KC Animal Health Corridor is an important industry growth initiative of the Kansas City Area Development Council (KCADC),” said Tim Cowden, president and CEO, KCADC. “We are proud to have Kimberly Young representing our organization and our region in attracting global animal health companies to the Corridor.”
KCADC was proud to work with a number of regional partners in attracting Virbac to the region: Missouri Department of Economic Development; state of Missouri; city of Kansas City, Missouri; Clay County Economic Development Council; KCP&L; Block Real Estate Services, LLC (BRES); Hunt Midwest; and the KC Animal Health Corridor.
This will be Virbac’s second site in Missouri with its manufacturing operations located in Bridgeton. In 2016, the company announced its decision to expand the plant in the St. Louis area where it currently employs more than 250 people.
“It is great to see a company continue to grow in our state and create job opportunities for Missouri families. Missouri’s highly-educated workforce, commitment to scientific advancement, and expertise in the manufacturing sector has made us the top destination for research and production in both animal health and plant science,” said Acting Director of the Missouri Department of Economic Development Mike Downing.
About the KC Animal Health Corridor
Companies with a business location in the KC Animal Health Corridor account for more than half of the sales generated by the global animal health industry. The Corridor, anchored by Manhattan, Kansas, and Columbia, Missouri, is home to more than 300 animal health companies, representing the largest concentration in the world. For more information, visit KCanimalhealth.com.
Founded in 1968 by a French veterinarian, Virbac is an independent laboratory that has always been dedicated to animal health. Currently ranked 8th worldwide, the company is present in more than 100 countries, offering a comprehensive and practical range of products and services covering the majority of species and pathologies. Virbac innovation, based on both technological advances and listening to the customers, relies on reactive production facilities which met the highest international quality standards. For nearly fifty years, these specific features have allowed the company to build a personalized relationship with veterinarians and farmers in every country. Through this privileged partnership, in which social, health and environmental issues come together, Virbac contributes, day after day, to shape the future of animal health.
About Hunt Midwest
Hunt Midwest is a full-service real estate development company with a focus on industrial, commercial, retail, mission critical, multifamily, senior living and residential real estate. Its portfolio is anchored by SubTropolis, the world’s largest underground business complex. Hunt Midwest is a Kansas City-based, privately held company owned by the Lamar Hunt family. The Hunt family business is a diverse portfolio of entities involved in real estate, sports/media, energy/resources, private equity and investments. Marquee entities include the Kansas City Chiefs, Hunt Midwest, Hunt Southwest, FC Dallas Soccer Club, Toyota Stadium, Chicago Bulls and United Center.
About Block Real Estate Services, LLC (BRES)
BRES is a full-service commercial real estate company managing over 37.85 million square feet of retail, office, industrial property and nearly 7,500 units of multifamily property for equity partnerships and third party owners. BRES’s portfolio of services continues its role as the most comprehensive commercial real estate firm in Kansas City by providing and specializing in: real estate brokerage services, tenant representation, investment services, asset and property management, economic incentives consultation, financial services, construction and development services, and the Block Funds.
Industrial Boom Sweeps Across KC
E-commerce, auto companies drive wave of spec projects.
Christina Cannon and Matt Valley – Heartland Real Estate Business
When it comes to the Kansas City industrial market, some developers have a build-it-and-they-willcome mentality.
Kansas City’s central location is attracting a number of e-commerce companies and strengthening the heavy automotive industry presence that has been a part of the city’s fabric for some time. To deal with demand and keep Kansas City on the radar, developers are ramping up construction on speculative projects.
“Tenants often don’t have time to come to town and build,” says Daniel Jensen, principal at Kessinger Hunter. “So if they come to a market like Kansas City that doesn’t have a certain kind of product available, they just keep going to the next market.”
For many tenants, however, that shouldn’t be an issue thanks to the amount of industrial space set to come on line in the near future. According to Costar, there was 5.3 million square feet of overall industrial space under construction at the end of the second quarter this year. This is on top of 2.8 million square feet of space that has already been delivered in the first half of the year.
“In the last three to four years there has been about 4.5 to 5 million square feet of new product brought on line each year and the majority of it has been getting absorbed,” says Jensen. “Everyone has gotten a whiff of fresh cookies in the air and has decided that they ought to be baking their own fresh cookies.”
Jensen notes that Kansas City is a fastpaced market, and when tenants want to set up shop, they want to do so quickly.
“People don’t want to come to the town and say, ‘we need to be up and operational in 18 months,’” says Jensen. “They want to come to town and say, ‘I need to order racks in 60 days, and I need to be operable in six months.’ That lends itself to a larger amount of spec space versus built-to-suit opportunities.”
Logistics Park continues streak
Leading the pack in speculative construction are NorthPoint Development and BNSF Railway with their 1,700-acre intermodal Logistics Park Kansas City. The 548,333-square-foot Inland Port XV came on line during the second quarter, and the duo has two more buildings totaling 1.5 million square feet to be delivered by the end of the third quarter.
“Logistics Park Kansas City is by and far the largest producer of spec space in the market and has been for the last several years, and that has everyone’s attention,” says Jensen. “They’ve been successful thus far getting deals done and absorbed, but are they going to be able to continue that pace? We just don’t know. Time will tell.”
Experts attribute some of the industrial park’s success to a shift in how companies are shipping goods.
“It used to be if a company was going to have three distribution centers they would have one on the West Coast, one on the East Coast and one in the Midwest. If they put one in the Midwest they generally went to Chicago or Dallas, somewhere with a larger population base,” says Jensen. “Now, we’re seeing the significance of Kansas City. You can get to about 90 percent of the population of the continental United States within two days by truck.”
Logistics Park Kansas City is the largest intermodal facility in the United States in terms of tonnage that passes through via rail, and it is the third largest trucking facility in the country.
Distribution hubs are becoming more important to e-commerce than population hubs, according to Mike Bell, vice president and general manager of commercial real estate for Hunt Midwest.
“I think initially when e-commerce was taking off you were seeing a lot of the distribution centers focused on the population density centers,” says Bell. “Now people are saying, ‘we’re going to locate in an area where we can touch the most amount of the country.’”
Shipping hubs in demand
Proximity to the major hubs of shipping companies is also an important factor for many industrial tenants in the area, says Bell. For this reason, the southwest corner and the northeast corner of Kansas City are seeing the brunt of construction and lease activity.
“Part of what we see is that tenants are locating in centers where they’re near FedEx and UPS,” says Bell. “In the northeast part of Kansas City we are near both FedEx and UPS, and are within 20 minutes of the airport. If somebody needs next-day shipping, we’re the last stop. These e-commerce companies can take an order from somebody at 7 or 8 p.m. and still get it shipped out the next morning.”
According to CoStar, of the 5.3 million square feet of industrial space under construction at the end of the second quarter, 4 million of that is in South Johnson County. The North of the River submarket welcomed over 900,000 square feet of the of 2.8 million square feet that was delivered to the Kansas City industrial market by mid-year.
Ford Transit provides a boost
E-commerce companies aren’t the only ones fighting for space in the industrial landscape. Similar to how Internet giants want to be near shipping companies, automotive suppliers and upfitters want to be near Ford Motor Co. and General Motors.
Roughly five years ago, Ford made the decision to transition its Econoline van model to the Transit van model, and locate that manufacturing operation in Kansas City. The new Transit vans can be upfitted to serve as contractor vehicles, shuttle buses or even ambulances, and every one is manufactured in Kansas City.
“When Ford made that choice it was a very monumental decision in Kansas City because the state of Missouri has since passed legislation to give automotive companies and other advanced manufacturing companies significant incentives,” says Bell. “That has propelled a lot of companies to come to Kansas City.”
Companies relocating facilities in Kansas City to become part of the automotive fabric include many manufacturers, suppliers and upfitters.
“Every time Ford or GM retools, it creates a feeding frenzy,” says Jensen. “Tenants that need facilities come racing to town just to be close to GM and Ford.”
One space that these support companies love to flock to is SubTropolis, the world’s largest underground business park. Hunt Midwest developed the park, which contains 6 million square feet of leased space and the ability to expand by another 8 million square feet. A surface business park providing even more options complements SubTropolis.
“We offer a unique perspective,” says Bell. “We are developing 2,500 acres of land on the surface and then below it we are developing virtually the same footprint.”
In addition to Ford, tenants catering to automotive industry that lease space in SubTropolis include Knapheide Manufacturing Co., Adrian Steel, Ground Effects and Leggett & Platt Commercial Vehicle Products, among others. So many upfitters are occupying space in the industrial cave that SubTropolis has even coined the moniker “Automotive Alley.”
“The temperature is constant, the humidity is constant,” says Bell. “For Ford to manufacture the Transit or the Ford F150, SubTropolis allows them to maintain a high level of quality and standards.”
SubTropolis does data
With tenants occupying anywhere from 10,000 square feet to 500,000 square feet, SubTropolis doesn’t just accommodate automotive companies. A data center opened in 2014 is bringing the industrial market full circle by attracting e-commerce users.
“We found having a data center relates closely to our e-commerce customers, because our e-commerce tenants need higher speed Internet connectivity,” says Bell. “With our data center and the fiber carriers that we have, we are able to connect our tenants with that.”
Bell notes that for e-commerce companies to survive they need both the logistics of being near shipping companies like FedEx and UPS and also bandwidth and connectivity, both amenities SubTropolis can provide.
“I see the data center as the cash register of e-commerce,” says Bell. “Somewhere there is a data center that’s running all the servers to allow e-commerce to flourish.” But not only can having a data center in the same area save on delivery speeds, it also adds a layer of security.
“That’s a big advantage,” continues Bell. “From a security standpoint, we are able to control all of our entrances, and because of our government tenants, we are required to have a high level of security.”
LightEdge Solutions, a cloud service provider, colocation and consulting company, was the first tenant at the 400,000-square-foot SubTropolis Technology Center and employees 200 people in the underground, hightech labyrinth.
Professionals immersed in the Kansas City industrial market agree about one thing — the market is booming. But for how long?
“Driving around SubTropolis and our Hunt Midwest Business Center, I’m seeing all of these ‘help wanted’ and ‘now hiring’ signs,” says Bell. “That to me sends the sign that the tenants are productive, their businesses are growing and they have a need.”
Jensen believes that all of this activity may be a new baseline, though the industry should prepare for the regular ups and downs within this framework.
“There most definitely is a cycle and even the new norm is going to have its downturn and its upturn. Larger users are finding Kansas City attractive and want to be here for various reasons, but without a doubt the feeding frenzy will slow at some point, and people will call an end to that cycle.” says Jensen.
“We’re playing musical chairs, and the music is going to stop and there’s going to be a few folks without seats. But having said that, I think the industrial market — the user market — is healthy.”
Hunt Midwest announces 126-acre industrial park expansion
Rob Roberts – Kansas City Business Journal
Responding to growing demand in the automotive supply, e-commerce and data center markets, Hunt Midwest has completed a 126-acre surface business park expansion.
The Hunt Midwest Business Center now can accommodate as much as 2 million square feet of new Class A warehouse and distribution space, the firm said in a release.
“HMBC is located in Clay County just south of Ford’s Claycomo Assembly Plant and adjacent to both the Norfolk Southern intermodal facility and Kansas City’s FedEx Ground hub,” Hunt Midwest CEO Ora Reynolds said in the release. “This makes HMBC an ideal location for e-commerce fulfillment centers, automotive suppliers and up-fitters.
“With direct access to I-435, companies locating in HMBC can ship to 85 percent of the United States within two days. The availability of multiple fiber carriers and diverse sources of power also make this a great location for data centers.”
Buildings planned in the business park’s new phase are designed for single-tenant and multitenant users and range in size from 200,000 to 875,000 square feet. One of the buildings, including 200,000 square feet, will be built on a speculative basis, meaning before tenants are lined up.
“With buildings divisible to as small as 50,000 square feet, Hunt Midwest Business Center will serve an unmet tenant demand in the industrial market,” Reynolds said in the release, adding that Hunt Midwest will offer tenants land purchase, build-to-suit and lease options. Go to KCBJ.com for more…
Demand for Space Below Ground Is Increasing in Missouri; a Steady 65 Degrees
By Max Taves, November 26, 2014
It is easy to underestimate the size of the Kansas City, Mo., industrial real-estate market. That’s because a big chunk of it is hidden from sight — underground.
Occupying more than 21.8 million square feet, Kansas City’s industrial underground space—80 to 150 feet deep, in former limestone mines—is the largest in the U.S., comprising more than 7% of the metropolitan area’s total industrial area.
And demand for the space is growing, buoyed by resurgent manufacturing and expanding distribution centers seeking low-cost real estate requiring less energy to operate.
Next week, FoodServiceWarehouse.com, a restaurant-equipment supply company, will be moving into 475,000 square feet of space that sits more than 100 feet below the surface in a facility called SubTropolis, the largest underground industrial space in the U.S. Signed in May, FoodServiceWarehouse’s lease was the largest by square feet—above or below ground—in all of Kansas City last quarter and the second-largest this year, according to real-estate data firm CoStar Group Inc.
“It’s kind of what we call an underground city,” says Ora Reynolds, president of SubTropolis owner Hunt Midwest Real Estate Development. SubTropolis has 8.2 miles of paved roads, 2.1 miles of railroad tracks, more than 500 truck docks, 1,600 parking spaces and 50 million square feet of space below ground. It’s 6 million square feet of leasable space is fully occupied by 55 companies and their 1,600 employees. Go to WSJ.com for more…
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