Just three months after landing one of the biggest industrial deals in the Denver market, Majestic Realty is at it again.
The company signed a lease with FedEx SmartPost for 200,000 square feet at its Majestic Commercenter in Aurora. The deal comes on the heels of GE Energy’s recent announcement that it would establish a solar panel manufacturing plant in a 280,000-sf building at the same park.
“We obviously feel great about the business park, now at about 4 million square feet of facilities, that we have had the two largest deals that have been done in the last six months in our marketplace,” said Majestic Realty Senior Vice President Randy Hertel. “I think it helps further validate the Majestic Commercenter as a business park.”
FedEx SmartPost, which Provides streamlined, small package delivery, is expanding out of 85,000 sf at Denver Business Center. With large, Class A industrial spaces in Denver in short supply, there were few buildings that met its size requirement and none that offered the same level of trailer parking as Majestic. Including an adjacent paved area, there are 106 spaces.
“I would say there were maybe three options, and this was clearly the best facility that matched their needs the best, because of the trailer parking. The trailer parking was what separated the buildings,” said Grubb & Ellis Co. Broker Tim D’Angelo, who represented the tenant with Dallas-based Fischer & Co.
The building at 20321-20431 E. 35th Drive, formerly occupied by Pitney Bowes Government Solutions, has a minimum ceiling clearance of 28 feet, as well as ESFR fire sprinklers, good maneuverability for large trucks and other state-of-the-art features. Because of that, it’s not the least expensive option in the marketplace, but Hertel said all of the large users that have been looking for space lately have considered the business park because they’re willing to pay rates “worthy of the types of facilities they’re looking to lease.”
According to D’Angelo, the northeast industrial submarket where Majestic Commercenter is located has a single 200,000- sf block of available industrial space – at Airways Business Center. Majestic Commercenter could put together 200,000 sf, but of that, 115,000 sf is direct space.
A couple of large industrial users – U.S. Foods and Interline Brands, either appear to be or already are going the build-to-suit route. “Our build-to-suit market, as we all thought it would, has come to life this year, and we’re starting to see some transactions, basically due to lack of supply,” D’Angelo said.
Jones Lang LaSalle broker Norm Blum represented developer Burnham Partners in the Interline Brands land deal at ProLogis Park 70. Interline Brands will occupy a 240,000- sf build-to-suit.
“There were only two options that physically could accommodate their requirements – ceiling heights, layout, loading, square footage,” he said. According to Blum, the developer will be able to deliver the company a customized building for a lower lease rate than it would have paid for existing space.
In most instances, though, rental rates in the Denver industrial market haven’t rebounded enough to justify new construction. “We’re getting close, but we’re probably a couple of more large transactions away,” D’Angelo commented.