NC real estate firm buys land near RTP to meet bullish warehouse space demand
As the pandemic causes online retail to boom, so does the demand for warehouse real estate, and a real estate firm based in Raleigh and Charlotte is pouncing on the opportunity.
Investor and developer Trinity Capital Advisors closed on 48 acres of land with plans for Alexander Commerce Park, an industrial warehouse space complex at the intersection of TW Alexander Drive and Stirrup Creek Drive on the Durham County side of Research Triangle Park.
The firm paid for $7.06 million for the land, according to real estate services firm CBRE, and is looking to develop “as soon as humanly possible” this year, said Jeff Sheehan, a partner at Trinity Capital.
Sheehan said their bullish attitude is driving them to develop the park themselves quickly before confirming any tenants out of an urgency to meet present demand.
“This particular play is about the warehouse market to serve all those people moving to the Triangle,” Sheehan told The News & Observer.
North Carolina ranks No. 5 on a list of states that gained residents this year, according to a Move.com survey. The state also just had its best year in terms of promised capital investments won by the state’s Job Development Investment Grant, The N&O reported previously.
Population growth in the area during the pandemic means accelerated demand for e-commerce. It also means more companies are looking to store goods near where people order them so they can be delivered quickly, he said.
The firm hopes to begin building two or three buildings immediately after plans are accepted by the city. They’re hopeful enough in the current market to be matched with tenants promptly. The rest of the park will be built speculatively, depending on demand, Sheehan said.
“Let’s get it built and let’s get the tenants before things change,” Sheehan said.
The space will be targeted toward tenants in the manufacturing, pharmaceutical and distribution industries.
“We have been tracking this site for quite a while now,” said Massie Flippin, a partner at Trinity Capital, in a news release. “The location at the epicenter of the Triangle, the lack of available product, and proximity to major highways and transportation corridors will make it very attractive to a diverse group of users.
Completion is expected by the end of this year with three buildings totaling to 441,280 square feet, the firm said.
Elsewhere in RTP, Trinity Capital made a large investment last year in the $160 million redevelopment of Park Point, a massive office, lab and retail site built out of a long-abandoned office complex.
Demand for industrial space
The announcement of Alexander Commerce Park is followed by Trinity Capital’s success with Eastgate 540, an existing industrial park acquired in 2019 that the company recently announced would be expanded.
Real estate services firm CBRE said industrial real estate has been among the most resilient in the COVID-19 pandemic due to rising e-commerce, which pressures companies to reach consumers with low transportation costs.
Online retail growth in the U.S. grew to 44.5% in the second quarter of 2020 from 14.8% in the first quarter, the firm said.
The firm’s research found that $1 billion in e-commerce sales growth generates need for 1.25 million square feet of warehouse space demand, pointing to a higher amount of built and occupied space in 2021 than in the last five years on average.
New industrial completions are forecast to jump by 29% this year, according to CBRE.
“Given strong (pre-leasing) of speculative projects, demand is expected to keep pace with new supply, especially as occupiers flock to modern warehouse space,” the firm said in a recent industry report.
This story was originally published January 26, 2021 at 12:58 PM.
