Industrial Development Continues as Vacancy Rates Fall

Nov 19, 2018

Two more – maybe three – industrial warehouses are being built in Northwest Jacksonville.

The city issued permits for an $18 million cross-dock building for Lake Washington Partners and a $7 million speculative warehouse for Becknell Industrial.

For Lake Washington Partners, the city issued a build-out permit Nov. 1 for The Conlan Co. to prepare space at 10920 New Kings Road for an unidentified tenant at a cost of $16 million.

The total project cost is $18 million, according to Lake Washington Partners of Issaquah, Washington. Lake Washington Partners is the owner and developer of the 373,650-square-foot building.

Spokeswoman Katie Michals said the company is not disclosing the tenant name but says the use will be a cross-dock warehouse distribution center.

The project includes the tenant build-out of a 6,000-square-foot office space, she said, along with lighting, dock doors and other infrastructure to support the tenant’s operations.

The city issued a concurrency reservation certificate in December for a 373,650-square-foot cross-dock distribution center on almost 25 acres at the site, north of Interstate 295. Lake Washington Partners bought the land in 2012.

Records show Lake Washington Partners bought the adjacent 27.2-acre site in 2008 and developed the SanMar Distribution Center, which distributes clothing.

Cross-docking is a logistics practice of unloading products from an incoming truck and immediately reloading into outbound trucks or trailers. For example, it can move products from a manufacturer directly to the customer with minimal handling and time.

Lake Washington Partners bought the site and applied for the certificate as J&J New Kings Road LLC.

The project is one of several projects under development by Lake Washington Partners, including a 562,000-square-foot building in Texas. The existing portfolio of more than 8 million square feet of space includes Class A office space and industrial properties.

For Becknell Industrial, the city issued a permit for Becknell Services to build a 185,686-square-foot speculative building on 18.7 acres at 12075 Pritchard Road in Westlake Industrial Park, which is west of Interstate 295.

The senior vice president of the Lyons, Illinois-based company said previously that demand for warehouse space was outpacing supply. He said the building was designed for one or two industrial tenants, such as manufacturers and distributors.

Colliers International Executive Vice President Guy Preston, who is working with Becknell, said the slab is being poured for the structure and construction is expected to be completed in April.

He said no tenant has signed, but there is a lot of interest.

Meanwhile, an industry project report shows that Becknell Industrial intends to expand its presence in Westlake Industrial Park with an estimated 160,000-square-foot speculative industrial building on 12.5 acres. Construction of the estimated $10 million project is expected to start in 2019.

Preston said construction will start on the second building after a tenant is signed for the first.

The projects join industrial buildings planned by Jackson-Shaw, VanTrust Real Estate, Industrial Park Investments, NorthPoint Development, Pattillo Industrial Real Estate and Hillwood.

“Jacksonville is in dire need of new product,” wrote Colliers International in its third-quarter Northeast Florida industrial research and forecast report.

“It is critically important for Jacksonville to have a reasonable stock of good, modern industrial building supply available to help accommodate large sophisticated operations when they are ready to move,” it said.

Third-quarter industrial reports for Jacksonville from commercial real estate companies found Northeast Florida vacancy as of Sept. 30 ranged from 2.8 percent to 4 percent, at or near record lows.

They found rising rental rates as well.

“A wave of new construction is expected to deliver within the next six to eight months, but is not expected to alleviate all of the pent-up tenant demand,” reports Jones Lang LaSalle.

That means more development could be announced in 2019.