News and Notes on Trends, New Projects and Construction Entering Or Leaving the Commercial Real Estate Development Pipeline Around the U.S.
In this week's edition of In The Pipeline, Facebook has become the latest company to build a data center in North Carolina, breaking ground Nov. 10
on a $450 million facility; developers and city officials have started construction of the 1,175-room Washington Marriott Marquis,
a convention center hotel in Washington, D.C.; an Italian developer opens the $670 million Setai Fifth Avenue Hotel & Residences
in Manhattan; Kern Schumacher, Utah's largest industrial property owner/developer, acquire land and buildings for a new manufacturing facility in Bowling Green, KY.
CoStar Group's In The Pipeline
is a column on significant land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project -- and sign up to be added to our distribution list
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Facebook Finally Friends North Carolina for New Data Center
Palo Alto, CA-based Facebook has become the latest company to build a data center in North Carolina, breaking ground Nov. 10 on a $450 million, 300,000-square-foot facility near Forest City, NC.
The facility will be Facebook's second owned data center in the U.S. The social networking company, which Monday announced a massive new service that will integrate instant messaging, e-mail and SMS text messaging for the service's 500 million users, is close to finishing a 307,000-square-foot data center in Prineville, OR, and operates leased data centers in Silicon Valley, CA and Virginia.
Construction on the facility on 150 acres began Friday and is expected to take 18 months. In announcing the project, North Carolina Gov. Bev Perdue said the state has negotiated with Facebook for about a year, working out details involving the site plans, utilities and incentives for the project. Facebook joins Apple, American Express, IBM and Google in locating data centers in the Tar Heel State.
The project is expected to create between 35 and 45 full-time and contract workers and more than 250 construction and mechanical jobs during the building phase. Additional expansion phases may be possible in the future depending on the social networking company's business needs.
"After a rigorous review of sites across the East Coast, we are pleased to locate our new data center in Rutherford County," said Tom Furlong, director of site operations for Facebook. "The team we will hire here will help us provide faster, more reliable and more robust service to people around the world who rely on Facebook to connect and share."
The building will be designed to LEED (Leadership in Energy and Environmental Design) Gold standards. In addition, Facebook will use innovative cooling and power management technologies to make the facility one of the most energy efficient data centers in the country.
Marriott Breaks Ground on $520M Hotel in D.C.
Developers and city officials have started construction of the 1,175-room Washington Marriott Marquis, a convention center hotel in the historic Shaw neighborhood.
The hotel at Ninth Street and Massachusetts Avenue, directly adjacent to the Walter E. Washington Convention Center, will bring an estimated permanent 1,000 jobs to the district when the hotel opens in spring 2014. The $520 million project will support an estimated 1,600 construction jobs.
The ceremonial ground-breaking Nov. 10 included Washington, D.C. Mayor Adrian M. Fenty, Rep. Eleanor Holmes Norton (D-DC), and officials from the Washington Convention and Sports Authority, Quadrangle Development, Capstone Development, Marriott International, Inc. and Destination DC.
The Washington Marriott Marquis will compliment the Convention Center with more than 100,000 square feet of meeting and assembly space, including a 30,000-square-foot grand ballroom, two 10,800-square-foot junior ballrooms, more than 53,000 square feet of meeting rooms, an 18,800-square-foot indoor event terrace and a 5,200-square-foot rooftop terrace. The project includes five retail and restaurant outlets on the ground floor.
Italian Developer Opens Luxury Hotel in Midtown Manhattan
Bizzi & Partners Development formally opened the $670 million Setai Fifth Avenue Hotel & Residences, a 214-room luxury hotel and 184 condominiums at 400 Fifth Avenue in Midtown Manhattan.
Capella Hotels & Resorts is managing the 60-story Setai Fifth Avenue five-star hotel, with guest rooms and hotel suites located on floors 1 through 30, and condos totaling about 570,000 square feet located on floors 31 through 60. The project features Ai Fiori, a new eatery by restaurateur Michael White, The Bar on Fifth, an Auriga spa and a Julien Farel salon. Gwathmey Siegel & Associates Architects and interior design firm DAS Concepts Inc. designed the building.
Bizzi & Partners Development, through its Italy-based parent company, BI&DI Real Estate, has developed and marketed more than 20 million square feet of residential, retail, and office uses globally. The recent ribbon-cutting ceremony included local and U.S. lawmakers as well as Italian ambassador to the U.S. Giulio Terzi di Sant’Agata and a number of Italian legislators, in addition to Bizzi & Partners Chairman Davide Bizzi and Capella Hotels and Resorts Chairman Horst Schulze.
Developer Begins Construction on SLC Industrial Space
Kern Schumacher, Utah's largest industrial property owner/developer, has begun work on more than 2 million square feet of industrial space in Salt Lake City.
The first phase includes 507,000 square feet of development under way by Salt Lake City-based Big-D Construction at 1525 South 5070 West, targeted for completion by July 2011. The project will increase Schumacher's portfolio to nearly 10 million square feet in Utah, California and Nevada. Freeport West Industrial Properties is the managing entity of the project.
"Because we see continued growth in industrial property development with companies that need to expand, we will continue to provide high-quality industrial buildings in our western footprint," said Bradley J. Ross, Freeport West's executive managing director. "Simply put, we believe in the economic strength of Utah."
Schumacher is moving forward on the project without commitments from potential tenants and has begun site work on the second phase, breaking ground on an additional 507,000 square feet in spring 2011. Upon completion, two buildings will follow shortly, adding an additional 2 million square feet to Utah's industrial market.
"Because of our product's quality, we have a solid record of filling our buildings with highly rated tenants, and we expect this development will quickly see the same result," Ross said.
Arizona tenants are looking to expand into Utah because of its location and distribution advantages, said Troy Schumacher of Arizona's Camroad Properties, Freeport West strategic partner. Developers will include T5 lighting, skylights, and various other environmental solutions into the project, including possible electric car charging stations, said Mark M. DeWald, director of business development.
Shiloh Buys in Bowling Green for Expansion
Shiloh Industries Inc. concluded negotiations to acquire land and building for a new manufacturing facility in Bowling Green, KY.
Shiloh will construct an 81,000-square-foot facility in the Kentucky Transpark on Jody Richards Drive. The new operation will provide blanking and stamping services for a variety of customers including the automotive industry and other industrial customers.
The facility is expected to be operational by April 1, 2011. The initial investment includes 15 acres that allows for further expansion as the business grows. (By Mark Heschmeyer)
ProLogis to Build Additional Space for Walgreens
ProLogis (NYSE: PLD
) has signed a deal with Walgreens in which the distribution center developer will build a 135,000-square-foot build-to-suit expansion for the drugstore chain, which will occupy 510,000 square feet of existing space at ProLogis Park 33 Building One in
The company will move into the existing space before the end of the year and will expand into the additional building in the spring of 2011, upon completion of construction.
"Not only do we expect to meet Walgreens distribution needs prior to the busy 2011 holiday season, but this transaction enables us to lease a large amount of our development portfolio, bringing the building to 100% leased while monetizing the remaining land at the site," said Larry Harmsen, ProLogis president of the United States and Canada.
The ProLogis Park 33 development will comprise two facilities totaling about 1.9 million square feet, now fully leased. BMW occupies 870,000 square feet in Building Two, a build to suit completed in December 2008, while B&G Foods occupies 420,000 square feet in Building One.
Bridgepoint Signs On for Build-to-Suit
Bridgepoint Education Inc. entered into a modified office lease with Sunroad Centrum Office I LP for 193,000 rentable square feet of office space in an eight-story building to be built in the Sunroad Centrum Project in San Diego, CA.
It currently leases 248,000 rentable square feet from Sunroad in an 11-story building in the Sunroad Centrum project. Bridgepoint will use the new space primarily for administrative offices, meeting rooms and online support services.
The initial term of the lease is 12 years, with two five-year renewal options. The delivery date is to occur no later than Jan. 31, 2013.
The monthly base rent over the initial term of the lease increases from $604,000 during the first year to $823,000 during the year 12. The total amount of base rent payments over the initial term of the lease is $99.7 million. (By Mark Heschmeyer)
Giant Preleases 41,200 SF in H Street NE Corridor
Giant Food signed a 41,200-square-foot prelease to anchor 360º H Street, Steuart Investment Co.’s 290,000-square-foot mixed-use development at Third and H streets NE in Washington, DC. It will be the Landover, MD-based grocery chain's first store in the area. Delivery is set for the first quarter of 2013.
The project includes land parcels totaling 1.5 acres and is part of the revitalization of the H Street Northeast corridor, which gained traction eight years ago. It will include 43,000 square feet of street-level retail topped by 215 multifamily units and two floors of subterranean parking for residents and shoppers. Construction is scheduled for next spring and rental units will be ready by 2013. Torti Gallas and Partners Inc. of Silver Spring is the architect. The corridor will also have a DC Streetcar line set to start operation in 2012.
Bob Schwenger of JBG Rosenfeld Retail represented the owner, while Giant was self-represented.
Steuart Investment is a Chevy Chase, MD-based real estate investment company that owns more than 9 acres in downtown DC. Its currently has four projects underway in Northwest, Northeast and Southwest Washington. (By Laurie Forbes)
Developer Sells 102 Acres in Winston Salem
Johnson Development has sold its 102.44-acre site located on Temple School Road in the Forsyth Industrial Center for $8.45 million, or $82,500 per acre.
Caterpillar, Inc. purchased the land, which previously had all utilities brought to site. Plans, permits and approvals are all in place to break ground in the fourth quarter of this year on a brand new, 800,000-square-foot manufacturing plant for the well-known producer of industrial and commercial equipment and vehicles.
Johnson Development purchased the industrial site just two years ago for $5.1 million, with plans to develop two industrial buildings totaling over one million square feet that never came to fruition. For more on this previous transaction, see CoStar COMPS #1562287.
Jonathan Sangster with CB Richard Ellis represented Caterpillar in their purchase of the land. The seller, Johnson Development Associates, was represented in-house. (By Justin Sumner, CoStar COMPS #1985380)
Developers Acquire South Jordan Land for $1M
Developers Fred Lampropolous and George Frioux purchased 4.78 acres at 1350 W. South Jordan Parkway in South Jordan, UT, from Prescient Inc. for nearly $1.13 million, or about $5.40 per square foot. The buyer plans a commercial development on the property for investment purposes.
Prescient Advisors sold the property while acting on the behalf of previous owner Barnes Banking Co., which had gone into receivership. It was an REO sale. Gary Nelson of Highland Commercial Inc. represented the seller. Jon Wright of InterNet Properties Inc. represented the buyer. (By Michael Greenhill, CoStar COMPS #1995698)
Meta Housing Acquires Land in Culver City for $3M
Meta Housing Acquires ½ Acre in Culver City for $3M
Meta Housing Corp. purchased land that was formerly home to the Pentecostal Church of God at 4925 S. Vermont Ave. in Los Angeles, CA. The church sold the 0.55-acre lot for $3.05 million. Meta Housing has approved plans and will break ground this month to build a 49-unit apartment complex that is scheduled for completion late next year.
The ½ acre-tract is between West 49th and W 50th streets on South Vermont Avenue in the Culver City submarket. The Pentecostal Church of God was the tenant since 2006, but vacated in the third quarter of this year.
Josefina Martinez from Prudential California represented the seller, while Albert Shilton from Charles Dunn Co. represented the buyer. (By Tyler Boyd; Costar COMPS #1986927)
Weldall Manufacturing Adding 76,000 SF
Weldall Manufacturing, Inc. has broken ground on a 76,000-square-foot expansion to its current manufacturing plant located at 2001 S Prairie Ave in Waukesha, WI.
The current 84,360-square-foot facility is located on 12 acres in the Central Waukesha Industrial submarket. The expansion will include three new drive-in bays and two 100-ton cranes to handle the more complicated fabrication and manufacturing processes that Weldall is adding to its workload.
Consolidated Construction is handling the construction, which began in mid-October and is expected to be completed by April 2011. (By Matthew Myers)
NCL Graphics Specialties Breaks Ground
NCL Graphics Specialties, a manufacturer of commercial labels and packaging materials based in Waukesha, recently broke ground on a new 60,200-square-foot distribution facility at N58 W14900 Shawn Circle in Menomonee Falls, WI.
The facility, expected to be completed around May 2011, will serve as the new home to the NCL operations currently located at the Sunset Gateway II building and the Westwood Business Center. The company also expects to complete a 50,000-square-foot addition about two years after Phase I of the development is complete. Design 2 Construct is constructing the facility to a full turnkey build-out.
NCL recently purchased the 6.4-acre parcel for $730,000, or $113,700 per acre, to develop the facility and eliminate leasing costs. Stephen Provancher and Adam Matson of NAI MLG Commercial represented the seller, Yale Equipment & Services, Inc., while Jeff Hoffman of Judson & Associates represented the buyer. (By Matthew Myers, CoStar COMPS #1991318)