Real Deals: Grubb Ventures targets ‘maker movement’ with latest Raleigh project

In recent years, Raleigh – like many other cities – has seen a boom in the number of small manufacturing operations that have been been dubbed part of the country’s emerging “maker movement.”

This collection of clothes designers, brewers, chocolatiers and other self-described artisans are taking advantage of advanced design tools, 3-D printing and other advancements to make local, hand-crafted products.

Unlike typical manufacturers, these businesses require both a limited amount of warehouse and retail space where they can make, market and sell their wares.

Seeing a real estate opportunity, Raleigh-based Grubb Ventures is now converting a one-time supermarket distribution center just northeast of downtown into a hub for such businesses. Last year, Grubb paid nearly $4.7 million for the 180,000-square-foot warehouse at the corner of Whitaker Mill Road and Atlantic Avenue.

Earlier this month, Grubb filed site plans with the city seeking to convert as much as half of the warehouse to retail or office space.

“There’s a lot of folks in the state that are actually making things again for the first time in a few decades,” said Sam Crutchfield, Grubb’s director of commercial leasing and acquisitions. “And there’s just not a lot of spaces set up for people that need some manufacturing piece but also want some exposure, visibility, a storefront, etc.”

When Grubb bought the building nearly all of its space was leased to warehouse tenants. Since then, Blackjack Brewing Co. has opened, leasing about 10,000 square feet, 2,000 of which is its tap room.

Murphy’s Naturals, a Raleigh company that makes mosquito sticks and candles, has also agreed to lease about 12,000 square feet of warehouse space and 7,500 square feet of office space. In addition to making its own products, Murphy’s plans to operate an incubator for other small manufacturers.

Although many of the “maker” businesses in Raleigh have located in or near downtown in recent years, Crutchfield said that they are beginning to get priced out as redevelopment accelerates.

Many of the existing buildings downtown that would be ideal for such manufacturers are now being targeted for redevelopment, Crutchfield said.

“Sadly, a lot of the really neat blocks downtown – because the land is so valuable – they’re going to have to get razed completely so developers can go vertical,” he said.

Given the price Grubb paid for the warehouse, which was originally built in the 1950s for the A&P grocery chain, Crutchfield said the company is confident it can make the project work targeting a tenant base that typically does not have a lot of money.

“We want this to have a community feel to it. We’re trying hard to find some good credit, local users,” he said. “We don’t want to turn this into just a fun, adaptive re-use that ends up getting filled with national names that are just kind of boring.”

The abundance of warehouse space in the area has already drawn a slew of new breweries, which may help Grubb attract other businesses looking to increase their visibility.

One issue with the 8-acre site is parking. The warehouse covers four acres, and the rest is concrete. Grubb plans to stripe off spaces and add islands and trees to comply with the city’s parking ordinances.

Crutchfield said Grubb is also hoping to lease space to several restaurants or other food service businesses, and it has already had conversations with potential tenants.

Although the warehouse project may seem like an unlikely one for Grubb, Crutchfield said founder Gordon Grubb has a history of being both opportunistic and creative.

He also noted that, given the number of deep-pocketed institutional investors now pouring money into the Triangle, small boutique development shops such as Grubb have no choice but to look for different opportunities.

“We have to be a little more creative in our thinking,” he said.

This story was originally published May 27, 2015 at 6:06 PM with the headline "Real Deals: Grubb Ventures targets ‘maker movement’ with latest Raleigh project."