Midwest, Amazon signed on for a 646,912-sf fulfillment center at
2305 Litton Ln. in Hebron, KY and 446,500 sf at Lexington
Property Trust’s 27200 W. 157th St. in New Century, KS.
New Jersey emerged a big winner from Amazon’s growth strategy. The company announced plans for three new fulfillment
centers in the Garden State last year that are expected to create
2,500 posi-tions, adding to the 13,000 jobs it’s already generated
since it first came to the market five years earlier. The company
opened a million-sf fulfillment center at 2551 Oldmans Creek Rd.
in the South Jersey town of Swedesboro, its largest in the state.
And North-Central NJ, it took up 992,043 sf at 2 Brick Yard Rd., a
Cranbury property that Clarion Partners started building on spec
in 2016. According to the New Jersey Business and Industry
Association, Amazon employs in excess of 13,000 full-time
employees in the state.
WAYFAIR’S A FAIR PLAYER IN NJ
Clarion received another 1. 4 million sf in pre-lease commitments
from Wayfair at its Cranbury Logistics Center, the redevelopment
of a 395-acre brownfield site in Cranbury. The property at One
Brick Yard Rd. went into the books as the largest speculative
building to begin construction in the state in 2017 and was the
largest new industrial lease signed in the state in the same period.
Wayfair’s brokerage team included Transwestern’s Jon
Varholak, managing partner; Alex Previdi, managing director;
and assistant VP Alex Motiuk. A JLL team of managing director
Nate Demetsky, senior managing director Paul Torosian and VP
Dean Torosian acted on behalf of the ownership. Clarion is
building the state-of-the-art facility with development partner
Trammell Crow Co. The development team consists of Clarion’s
Joe Zingaro, Jesse Harty and John Clinton and Trammell Crow’s
Andrew Mele, Matt Nunn and George Laigaie.
ATLANTA LANDS MASSIVE INDUSTRIAL USERS
Atlanta saw millions of square feet in industrial deals last year. Take,
for instance, the leases signed by Lindt and Uline for over one million sf each. The chocolatier signed its deal for a facility at Lambert
Farms-King Mill Rd. in McDonough, GA, while Uline’s new space
sits at 705 Braselton Industrial Blvd. in Braselton. Meanwhile,
Duracell took 873,800 at 5000 Bohannon Rd. in Fairburn. Yet the
city’s biggest deal involved a non-domestic player.
A global brokerage team helped negotiate a deal that
brought London-based Asos to Atlanta in August. After an
extensive site search that began with 100-plus potential sites
across 10 different states, the fashion giant signed for a millon-sf facility that will serve as its first fulfillment center in North
America, thanks in part to the efforts of local officials and
incentives to lure the company.
The 15-year lease is for a 1,039,843-sf facility located a 108-acre
site at 4500 Derrick Industrial Pkwy. in the Majestic Airport
Center IV Business Park in Union City. Asos plans to invest over
$40 million in the first phase of development, slated to open in
the second quarter of 2018 and expected to create 1,600 full-time
The deal represented the largest new industrial lease com-
pleted in the Southeast in 2017 both in size and dollar valye,
and one of the country’s five largest new industrial leases com-
pleted in 2017. The grounds will feature a variety of amenities
and services, such as a gym, recreation areas, collaborative
space and a dining and recreation space. Additionally, NKF
negotiated the lease to include on-going access to over 20
acres adjacent to the site for Asos to develop walking and jog-
ging trails plus public green space.
The team representing Asos in the project included Charles
Binks, warehouse and logistics department head of UK-based
Knight Frank; Robert Hess, vice chairman and global strategy
team leader for NKF; Brad Lindquist, senior managing director
in NKF’s global strategy and location consulting group; Geoffrey
Kasselman, executive managing director, transaction services,
and leader of NKF’s industrial services group; Dave Watson,
Tommy Turner and Steve Bonge senior managing directors,
transaction services. Steve Conway, partner and market officer,
was the in-house rep for the landlord, Majestic Realty Co.
FUNDING KICKS OFF MASSIVE TRANSIT REDEVELOPMENT
The midyear closure on some $1.6 billion in financing needed to
get the Phase 2 underway on the Moynihan Station redevelopment
took place. The $3-billion Moynihan train hall project addresses
one of the nation’s direst infrastructure needs by redeveloping the
landmark James A. Farley building adjacent to Penn Station into
the new home for Amtrak and the Long Island Rail Road in New
York City, transforming the historic post office into a state-of-the-art
passenger railroad station and mixed-use development.
The funding for the project combines contributions from federal, state and local stakeholders as well as an upfront contribution from the private developer and an innovative $526-million
loan from the US Department of Transportation’s Transportation
Infrastructure Finance and Innovation Act, consisting of financing backed by property taxes to be generated by the 850,000 sf in
private office and retail development surrounding the train hall.
This real estate value capture revenue stream and credit was a first
of its kind transaction for the TIFIA program and was essential to
fully funding construction of the project.
The capital for the project is comprised of three key components: an upfront cash payment from the developer; the TIFIA
loan backed by taxes; and grants from state and federal sources.
The deal forged a custom financing structure that provides an
MTA credit support mechanism for the TIFIA borrowing, ensuring an investment-grade credit rating for the project, but was
crafted with a variety of developer guarantees to minimize the
long-term exposure for the MTA while also protecting the lender
from potential fluctuations in the property market.
The financing flow of funds includes provisions to allow for a
substantial capital reserve to support ongoing train hall maintenance needs to ensure the project remains in good condition for
passengers and railroads alike. the required upfront contribution
of $230 million from the developer provides additional protection to ESD and the MTA and further reduces the risk of default.