Commercial demand growing
Published 9:24 pm Wednesday, November 12, 2014
A California-headquartered company’s September announcement that it will build an East Coast furniture manufacturing plant at CenterPoint Intermodal Center rates among several positive signs for commercial property in Suffolk, an agent who helped set up the deal says.
Friant and Associates, which designs and manufactures office furniture, will be the third client at the 900-plus-acre CenterPoint, joining Ace Hardware and the Navy Exchange.
Like the other two users, Friant plans a build-to-suit facility harnessing the potential of the Port of Virginia.
Lang Williams, senior vice president at CBRE Hampton Roads, was Friant’s Hampton Roads representative on the CenterPoint deal. He highlighted the city of Suffolk together with CenterPoint connecting Kenyon Road — home to several other industrial facilities — through the intermodal park to Route 58.
“That will open up a good portion of the rest of the park for other users,” Williams said.
CBRE helped Friant evaluate options in this region, but it also evaluated “a number of other East Coast properties,” Williams said, adding that the port, quality of the workforce and an attractive incentives package helped seal the deal.
Friant, Williams said, owns a manufacturing plant in China and manufacturing and refinishing plant on the West Coast in Oakland. Its customers are across America. “It makes it easier to serve all those that sell their furniture,” he said.
CBRE hopes to have more good news regarding CenterPoint in the near future, Williams said. One industry poised to generate more jobs in Hampton Roads is coffee roasting, he added.
Williams pointed to the port’s certification earlier this year to take deliveries under a futures contract for Arabica beans. Businesses taking advantage of the commodities exchange will need facilities to store beans, he said.
Suffolk is already home to roaster Massimo Zanetti, and Isle of Wight County has Green Mountain Coffee. “Who knows, perhaps we’ll be lucky and get another roaster to come into the region,” Williams said.
Meanwhile, Williams reported that California Cartage Company, which started out leasing a building at Virginia Commerce Center on Kenyon Road in 2011 to provide logistics services for Target, signed two new leases for Suffolk real estate in August.
The deals include 336,000 square feet at 324 Moore Ave. in Commonwealth Commercial Center, as well as 71,950 square feet from Nansemond Cold Storage.
“That’s a lot of space,” Williams said.
On office space, Williams said Suffolk inventory would essentially dry up when the 86,400 square-foot Lakeview Technology Center 2 is sold or leased.
Across from the former U.S. Joint Forces Command site on the edge of the Burbage Grant neighborhood, Harbour View developer Bob Williams built the massive office building anticipating JFCOM would need more space.
But while other commands have soaked up the square footage JFCOM occupied before its disestablishment in 2011, the building remains vacant.
“I think for both office and industrial, the recession led to no new product being developed,” Lang Williams said. “Supply has been in check through the recession. Now, when we have (reached) absorption, it’s going to lead to new development — we hope.”
Friant and Associates, he said, had considered only one other option in Hampton Roads: a large existing warehouse in the city of Hampton. “They thought it was better to build a new building exactly to spec,” he said.
With almost twice as much floor space as the next largest — a new FedEx distribution center in Hampton — the new CenterPoint facility is the “the largest and most significant” Hampton Roads project inked in the third quarter this year, Williams said.
Led by the strong activity in Suffolk, as well as the Greenwich/Cleveland Street and Cavalier Industrial Park submarkets, the overall vacancy rate in the Southside industrial market fell 30 basis points in the third quarter to 9.5 percent, CBRE reports.