February 19, 2016
Industrial Park Picks Collierville
By James Overstreet
– The Memphis Business Journal –
Dallas-based Trammel Crow Co. Is leaping back into the local real estate development market with a $16 million, 552,000-square-foot industrial complex in Collierville, a town continuing to benefit from Nonconnah Parkway.
Trammell Crow, which is providing development, management, leasing and property management services for the park’s owner, is launching the project with a $3 million, 117,500-square-foot facility that is scheduled for completion in the fourth quarter.
The complex, being called Collierville Business Park, will consist of five buildings, including buildings of 195,000 square feet, 152,500 square feet and 87,500 square feet. The park is located about a mile north of the future Nonconnah Parkway interchange at Highway 72.
The buildings will include concrete tilt walls, 24-foot ceiling heights and dock-high loading in the rear of the structures.
Collierville Business Park, the first speculative Class A warehouse development in Collierville, has some industrial real estate players questioning whether the project is viable. But with current infrastructure improvements and Collierville’s explosive growth, demand for the space should be high, says Curt Grantham, Trammell Crow managing director in Memphis.
"We are seeing more and more demand from a smaller user base for a Collierville location, but there is simply not a base of product available for these users today," Grantham says. "We believe that there is a significant amount of demand for this type of facility and feel very comfortable being on the leading edge of industrial development in Collierville."
The park is adjacent to two warehouses occupied by Cleveite and Proctor Silex. While not known for spec industrial development, Collierville is home to companies like Carrier Corp., Delta Beverage Group, Alpha Corning, Hart Furniture Co. And Troxel Chemical Co.
The city is the future home of Federal Express Corp’s 400,000-square-foot technology campus, which is under construction at Nonconnah Parkway and Bailey Station Road.
And not far west of Trammell Crow’s development is Boyle Investment Co.’s $350 million, 450-acre Schilling Farms development, where the Memphis based firm is preparing to launch a 63,000-square-foot office/service facility.
The office/service building, with construction expected to begin this fall, will be followed by a 110,000-square-foot distribution facility. That facility will sport a glass front, 24-foot clear ceilings and 7,600-square-foot truck bays. Both facilities are currently being leased.
"Collierville is growing so fast it scares them," says Joel Fulmer, Boyle Investment vice president. "And if you stop and think about it, the attention on bulk warehouse product will probably remain in the Hickory Hill/Shelby area. But there is only about 2 and a half years of supply left out there. What do you do after that?"
Real estate developers are beginning to ask that question now with answers ranging from DeSoto County in Mississippi to the Memphis International Airport area to the I-40 Corridor. Trammel Crow likes Collierville’s chances as well.
"It was fairly important that we get some pretty good pre-leasing activity, but if we didn’t, it wouldn’t have stopped us," Grantham says. "But we have several potential tenants that we’re talking to. That activity has certainly helped."
Both Trammell Crow and Boyle Investment are targeting smaller, industrial users, companies looking for 7,500 square feet to about 200,000 square feet. That niche has a solid chance of succeeding, analysts say.
" I don’t think you’ll see a bulk distribution market out there-at least not until that last leg of Nonconnah is completed," says Jim Mercer, vice president of CB Richard Ellis. "It’s an untested market out there though. But Trammell Crow has obviously done their homework. They’ll be the only game in town, and it’ll probably do well."
There’s also a niche market of Collierville-based manufacturers and distributors that Trammell Crow and Boyle could tap successfully.
"I’d say it’s the most risky development to date because there are still several good opportunities back to the west," says Wyatt Aiken, senior vice president of Commercial Tennessee, Inc. "That a developer is willing to take that kind of risk is a good sign of the strength of the industrial market here."
Collierville Business Park is owned by an affiliate of Compass Financial, a private real estate investment company. Trammell Crow manages and leases about 450,000 square feet of industrial property in the Memphis market for Compass Financial.
Trammell Crow, one of the nation’s largest commercial real estate companies with 140 offices in 70 markets nationwide, has been in Memphis since 1971.
The Collierville park marks the first multi-building project the company has undertaken in Memphis in about seven years.
"This is a trend nationwide for Trammell Crow," Grantham says. "The company is likely to start in excess of $1 billion in new developments this year."