Sealy & Co. renews 1.6M SF lease with World Wide Technology in Edwardsville

Sealy & Co. has secured a lease renewal for two buildings with World Wide Technology (WWT) at Lakeview Commerce Center II and III in Edwardsville, Ill., covering in excess of 1.6 million SF. WWT, the company’s largest tenant, has maintained a long-term relationship with Sealy.

Lakeview Commerce Center II, located at 3971 Lakeview Corporate Dr., comprises 539,877 SF and includes a variety of enhancements. The facility, which was delivered in 2006, features 29,900 SF of office and laboratory space, T5 specialty lighting, and generators for emergency backup.

Lakeview Commerce Center III, a distribution center located next door, encompasses the bulk of the square footage with 1,109,830 SF. Originally completed in 2008, it was expanded in 2015 to add more office space, custom trailer stalls, and enhanced security measures. This building also recently earned the BOMA 360 designation for its high standards in energy efficiency, safety, security, and tenant relations.

Both properties are ideally located in the Metro East industrial submarket of St. Louis, just west of Hwy. 111, with direct access to I-270 and downtown St. Louis only 20 miles down the road.

Negotiations for the renewal were led by Sealy’s Regional Director William Shagets, with support from Cushman & Wakefield’s Ed Lampitt and Matt Eastin.

The St. Louis industrial market continues to see strong leasing activity through the third quarter of 2024 with a vacancy rate of 4.7%, according to a CBRE report (St. Louis Industrial Figures Q3 2024). Leasing activity surpassed 1.2 million SF, up 24% from the previous quarter. While the Metro East submarket had the second-highest vacancy rate in the area just under 10%, it led the region in leasing activity with 414,000 SF for the quarter.

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Header image: Lakeview Commerce Center puchased by Sealy & Co. in 2020 is located just 20 miles from downtown St. Louis in Edwardsville, Ill. Image courtesy of St. Louis Regional Freightway

Insatiable appetite for commercial real estate continues

The St. Louis-area CRE market is still hungry for more, according to Commercial Real Estate Women (CREW)-St. Louis’ “Industrial Outlook” panelists.

Christie Brinkman, director, design build, Castle Contracting, LLC, moderated the March session as panelists, Cara Weber, Wakeel Rahman and Christy Campbell discussed recent pandemic-related challenges and predictions going forward.

Cara Weber, vice president, business recruitment, Missouri Partnership, said the Partnership is a public/private entity funded by the State of Missouri’s Department of Economic Development and the Hawthorn Foundation to focus on attracting new businesses to the state by functioning as a sales tunnel that includes marketing, business development and project management.

“Our Raise the Bar program is identifying sites for development so the region can control its own destiny,” Weber said. 

In the past five years, the Partnership has opened 615 projects and lost 142. Wins by industry include advanced manufacturing, energy solutions, food solutions, logistics and distribution, and office-based space.

“Expansion is incredibly important — about 80 percent of new jobs are coming from expansion,” she said. “I’m excited about the level of project flow so far this year, which has been mostly industrial. We’re seeing a lot of searches for existing buildings, but don’t have a lot available.”

“Retention (of businesses) is the key component. Attraction is our wheelhouse,” Weber said. “We’re getting more opportunities from big OEM businesses.”

Available CRE space is a factor in lost projects, along with whether a business has an existing presence in the area and concerns about logistics, incentives, available workforce, business costs and infrastructure, according to Weber. 

“What’s great about Missouri is our transportation resources: rail and river,” she said.

The CRE profession is faced with “trying to meet an almost insatiable demand for commercial real estate,” said Wakeel Rahman, vice president, NorthPoint Development. “The market is very healthy. Retail stepped up to take a lot of space to compete with Amazon.”

E-commerce is driving the market from “just in time” (JIT) to “just in case” (JIC), and the ratio of inventory to sales in the supply chain should increase. 

Rahman warned that national headwinds to watch include continued supply chain delays and cost increases for materials and construction, NIMBYism (Not In My Back Yard) attitudes toward industrial properties, entitlement and permitting, and warehouse fatigue. 

“St. Louis is still one of the tightest markets,” he said. “Looking forward, we will see an increase in automation and more-affordable systems; new geographies where companies can build; and spending more on infrastructure, which means good things for our industry because it creates improved access.”

The preliminary 2022 first-quarter numbers are encouraging, said Christy Campbell, brokerage associate, Cushman & Wakefield: “2.2 MSF of positive net absorption and a 2.9 percent vacancy rate — the lowest ever.” Asking rates are increasing in response, she said. “While St. Louis has always been a stable market, 2021 was a record year and we’re already halfway there in 2022, with 8.3 MSF under construction among 26 buildings with only one that’s tax-abated.”

Royal Canin, Ryder and Imperial Dade are leading the field; Duke Realty has completely left the market. 

The largest Q1 investment sales have been Duke to Exeter Property Group, Inc., TriStar Properties to Apollo Global Management and Duke to Pontegadea Inversiones as cap rates continue to compress.

“Trends are an upward pressure on rental rates and annual increases, changes in marketing strategies with less and less advertised rates, increased emphasis on e-commerce, and the move from JIT to JIC,” Campbell said.

In terms of some of the issues that Rahman noted, “The most common misconception about the industrial sector is negative environmental impact of large facilities on a community; but in reality, there’s no stress on schools, there are new jobs, and LEED buildings with high-tech electronics-driven systems are environmentally friendly,” she said.

“Industrial tenants are looking for buildings with 30- to 40-foot clear heights because of racking and are making heavy trailer parking demands,” Campbell said. “Land prices are increasing across the country, although St. Louis is lagging behind the coasts.” 

Upcoming CREW-STL events include Coffee with CREW, April 1; Membership Hike, April 6; Bar K & Green Street Real Estate Ventures Happy Hour and tour, April 12; and Dine Around, April 19. To register or for more event details, visit https://crewstl.org/events.

St. Louis Regional Freightway releases Q2 2021 Industrial Report

As global and domestic markets recalibrate in the pandemic recovery environment, it has never been clearer just how important freight logistics and a healthy supply chain are to keep the economy moving. Demand for distribution space continues to grow, and a new report released by the St. Louis Regional Freightway reveals the southwestern Illinois and eastern Missouri region is rebounding from the uncertainty of 2020 and is well positioned to assist distributors and developers meet that demand. 

The St. Louis Regional Real Estate Market Indicators & Workforce report focuses solely on bulk industrial buildings that are vital to the freight and logistics supply chain. The data highlights the strong market fundamentals in the St. Louis region, recent trends in construction and development, and the latest labor figures that demonstrate the presence of a highly skilled workforce ready to meet the needs of the bi-state region’s robust supply chain logistics, distribution and manufacturing industries. 

Key Takeaways from the Report  

• Construction has rebounded from the uncertainty of 2020, with construction completions already totaling more than 1.8 MSF (over 70% of total completions from 2020) with an additional 1.6 MSF under construction, which is close to pre-pandemic levels.

• Speculative construction activity levels are at 2.2 MSF for 2021, which equals speculative activity in both 2018 and 2019, a clear indication that developers believe the St. Louis market remains a strong place for industrial growth.

• Bulk distribution buildings (more than 250,000 SF) remain the fastest growing sector in the St. Louis inventory.

• The direct average asking rent for the entire St. Louis, MO-IL MSA market is at $3.76 per square foot for Q2 2021, which is close to 2019 rates but is a nearly $0.50 drop from five years before during Q2 2017.

• Madison County in Illinois and North St. Louis County in Missouri represent the largest inventory of bulk buildings within the region with 68.8% of the building stock. When one factors in that an additional 6.9% of the bulk buildings are in neighboring St. Charles County (MO) to the west, it reinforces the locational advantages of being along the Interstate 70 corridor are a key driver of that concentration.

Examples of how the St. Louis region is supporting successful industrial developments are highlighted through a spotlight on the major redevelopment and investment in former and current auto manufacturing sites in the area. Following a $1.5 billion investment by General Motors into growing its Wentzville Assembly Center in 2019, the plant now employs 4,300 workers. The transportation and warehousing industry grew 11% faster in the five-mile radius around the GM plant than the national average.

Meanwhile, an estimated $550 million has been invested in developing both the Fenton Logistics Park and Aviator Business Park (at the sites of the former Chrysler and Ford auto plants respectively). Today, these redevelopments have collectively generated more than 3,150 jobs with more to follow at Fenton Logistics Park as the final four buildings are fully built out. 

“Aside from the region’s locational advantages and exceptional freight network, the developers of both projects cited the available workforce as a contributor to the success of the redevelopments,” said Allison Gray,  vice president, Steadfast City Economic & Community Partners, which developed the report. The fact that the St. Louis region has more workers in Production Occupations and Transportation/Material Moving Occupations than Louisville, Kansas City, and Nashville is an indication it can continue to deliver on the workforce front.

A second spotlight on the Illinois Route 3 Corridor in southwestern Illinois showcases its strength as the backbone of a 60-mile long logistics and manufacturing corridor that spans from north of Alton in Madison County to south of Waterloo in Monroe County and has access points to six Class 1 railroads, five airports with capacity, four interstates with national access, and America’s third largest inland port.

“We’ve enjoyed the fruits of the corridor and been part of it for nearly 150 years,” said Mike Patton, general manager of U.S. Steel, an integrated, flat rolled steel manufacturing operation in the heart of the Illinois Route 3 corridor. “But one thing that’s been fairly constant is we rely heavily on getting product to us, as well as shipping our product, and being geographically located in the Midwest, as well as having all of those transportation ways, if you will, there’s been a huge advantage for this facility and one of the reasons we’re still here.”

Information about nearly a dozen prime industrial sites along the Illinois Route 3 corridor and dozens of others across the bi-state region can be found in the Featured Real Estate Sites Map that rounds out the latest report. The map can also be found on the St. Louis Regional Freightway’s Website at www.thefreightway.com.

“With more than 51 million square feet of modern bulk inventory supported by a strong labor force and an exceptional freight network that provides tremendous optionality to move goods into and out of the region via river, rail, truck and runway, the bi-state St. Louis region is well positioned to deliver as demand for bulk distribution space to meet growing consumer demand increases,” said Mary Lamie, vice president of Multimodal Enterprises for Bi-State Development and head of the St. Louis Regional Freightway.

The report was released on the final day of FreightWeekSTL 2021, which was held May 24-28 and featured industry experts and leaders in freight, logistics and transportation. The week-long event was delivered by St. Louis Regional Freightway, The Waterways Journal and Bi-State Development. To see video from each of the FreightWeekSTL 2021 panel discussions, visit www.freightweekstl.com.

Soulard Commerce Center bridges e-commerce, consumer gap

Soulard Commerce Center, a Class A warehouse building located in the 35-acre Soulard Business Park, is complete and available for leasing, according to JLL.

Developed by The Opus Group, the 154,937-SF spec warehouse is the first modern industrial building in the area since 2004. The building can accommodate final-mile destination warehouse and delivery, light manufacturing or general office/warehouse uses.

“This area of the city, and for that matter points further south in the city and county, are the most supply constrained in our market when it comes to modern industrial building product. It is a swath of the market with significant barriers to developing at scale, and The Opus Group has achieved that in Soulard Commerce Center. In the process, they’ve created a unique alternative for industrial occupiers who previously had to consider locations further away from their customer and employee bases,” said Pat Reilly, executive vice president of industrial leasing for JLL.

Soulard Commerce Center is designed for multiple tenants with individual build-to-suit spaces starting at about 22,000 SF. It features 32-foot, clear-height ceilings and 24 trailer parking stalls to suit a variety of uses, including e-commerce and urban logistics.

With easy access to Interstates 44, 55, 70 and 64, the building location can meet the distribution needs of modern final-mile networks, which have become more important with the explosive growth of e-commerce.

“The recent boom in e-commerce has created an increased demand for modern industrial space,” said Ryan Carlie, director of real estate development at Opus. “Soulard Commerce Center provides tenants a diverse space that can accommodate a variety of needs within a convenient and desirable location.”

The building benefits from 25-year real estate tax abatement. Base rent for the building is $6.50 per square foot.

Midwest warehouse demand continues to rise

Booming interest in industrial space continues to fill St. Louis industrial parks and warehouses, according to commercial real estate firm JLL.

With a flurry of new leases signed in the last quarter, the brokerage firm says last year’s figures have met the record of 4.1 million square feet of absorption previously set in 2019. According to JLL’s 2021 Midwest Industrial Outlook, the Midwest markets are seeing unprecedented growth and will need 275 million square feet of new warehouse space in the next five years to accommodate surging demand.

“Had you asked in March what the outlook for industrial real estate would be for 2020, the answer would not have been where we are today,” said David Branding, managing director for JLL’s St. Louis industrial markets team.

“The activity, especially in last quarter, helped achieve another record year of absorption. We fully expect to see the same momentum and even an increase in demand going into this year and likely well beyond,” Branding said.

JLL’s report indicates that St. Louis experienced a 79 percent increase in bulk inventory since 2016 after having virtually no new construction from 2009 to 2015. In 2020, e-commerce accounted for more than 40 percent of the leasing activity. The majority of new warehouse construction continues to be in North County, St. Charles and the Metro East.

Last quarter, JLL represented tenants and developers in more than 670,000 square feet in new lease agreements. Altus Properties signed a 135,400-square-foot lease at its Corporate 44 Business Park in Fenton, Mo. Building 4 at the park is now fully leased with the expansion of current park tenant Re-Sort Solutions, a specialty packaging and warehouse company.

Cambridge Engineering, a Chesterfield Valley company, signed a lease for 68,605 SF within the Wentzville Distribution Center, owned by SparrowHawk Development. This lease brings occupancy in the building to 100%.

Agile Packaging Solutions, a specialty packaging company serving customers in St. Louis, leased 241,448 SF at Park 370 Center 1 in Hazelwood, Mo., bringing the building to 100% occupancy.

JLL also represented St. Louis Business Center on two recent lease agreements within the center, located in the North City submarket. Werner Enterprises and American Trailer Rental Group have both leased trailer yards within the park. The leases are part of a larger trend of facilities catering to increased commercial truck and trailer traffic related to e-commerce, both in and around the St. Louis market and on cross-country routes. This is American Trailer’s first St. Louis location.

Top tenant expansions in the St. Louis market include Amazon, World Wide Technology, Geodis, Reckitt Benckiser and Save A Lot. The companies signed 18 new leases totaling more than 8.7 million SF. The area’s top developers, including NorthPoint, TriStar, Pannattoni, Duke Realty and CRG, brought more the 15 million SF of new warehouse space to market in 2020.

“With an expected $900 billion increase in e-commerce sales expected in the next five years, St. Louis is poised to gain significant investment and growth among major institutional players, some who have already begun recognizing the market, and others who undoubtedly are now starting to take notice,” said Branding.

The Opus Group embarks on 13.5-acre industrial site in Earth City

Castle Contracting has begun earthwork and site utilities installation on a 13.5-acre, two-building industrial development for The Opus Group in Earth City, Mo.

The St. Louis suburb site offers easy access to I-70 and Highway 141 and will include two warehouses - one speculative - the other for Johnstone Supply's new office headquarters and distribution center.

Johnstone Supply, an HVAC equipment and parts supplier, plans to occupy four acres of the site to support the company's plans to centralize operations, further establish its presence in the St. Louis area and hire additional employees.

Opus' custom-designed, 10,000-SF office space will feature a working lab and training center where the company will provide hands-on certification training for St. Louis County mechanical licensees. The distribution center will occupy the remaining 35,000 SF.

The remaining 9.5 acres will include an 111,000-SF speculative industrial building, built to accommodate multiple tenants. The spec building will feature 32-foot clear height, 27 dock positions (including two drive-in positions) and clerestory windows to maximize natural light and wall space.   

Completion of the speculative industrial building is scheduled for May 2021; the Johnstone Supply headquarters is set for a February 2021 completion date.

STL Regional Freightway launches new real estate site map

The St. Louis Regional Freightway has launched the expanded Featured Real Estate Sites Map section of its website, which highlights a wealth of information about the bi-state St. Louis region’s growing real estate market with its abundance of warehouse/distribution buildings and land sites ready for all types of industrial and corporate users.

The new tool is another offering from the St. Louis region’s go-to source for coordinating freight activity, which is committed to providing up-to-date information for the entire industrial market as it works to provide both marketing for active sites and accurate listings for interested parties.

The Featured Real Estate Sites Map section at www.thefreightway.com/real-estate/ provides a unique look at the region and pulls data from both the Illinois and Missouri sides of the Mississippi River, spanning from the City of St. Louis to multiple surrounding counties in the bi-state area, including opportunities at two airports.

“The goal is to collaborate between municipalities, counties, and cities in the St. Louis region and market the entire St. Louis MSA as an active, business-focused, growth-ready region primed for further industrial development,” said Mary Lamie, head of the St. Louis Regional Freightway and executive vice president of Multi Modal Enterprises at Bi-State Development.

The St. Louis Regional Freightway site is tracking 37 sites with more than 8,000+ acres available for development. These sites are actively updated with site information, pricing changes, and accurate contact information to make it easy for anyone searching for potential operation locations.

Data is compiled through communication with brokers and developers around the region and also from third party property databases. The website is regularly updated and is provided without cost to property owners, brokers and developers

Sites included on the website must all meet the following criteria: the developable land is 20 acres or larger; the site is being actively marketed; existing structures are modern bulk buildings (minimum 24’ clear height); the location has access to a major transportation highway, rail spur (or rail potential), seaport access, or runway access; and, lastly, entitlements and utilities must be in place.

The sites are all located in the bi-state St. Louis region, which is becoming increasingly recognized as business focused and perfectly situated to help companies both large and small, seeking a single location with global access. The region is suited for operations ranging from a global headquarters to manufacturing operations to distribution hubs to call centers or service centers at a cost-effective level. It allows companies to find the right spots for every branch of their company in a single region while having a global reach. The abundance of developable land makes it easy to get a site selected, construction started and operations commenced.

“St. Louis not only has the places and the people that companies need to grow but also all has the logistical advantages of being in the middle of it all, which allows easy access to their supply chain,” said said Allison Gray, vice president, Steadfast City Economic & Community Partners. “The Real Estate section of the St. Louis Regional Freightway website is the best spot to find all of the up-to-date information for industrial sites across the entire region.”

While the website will be regularly updated with new sites as they are announced, the following is a summary of the newest sites added prior to the launch of the expanded website:

• Mid America Commerce Center – New industrial park in O’Fallon, Ill., developed by TriStar Cos. with more than 200 acres of developable land for warehouse/distribution buildings ranging from 25,000 SF to 710,000 SF with a possible 10-year tax abatement.

• Dupo Real Estate & Development Sites – Dupo, Ill., offers multiple sites for commercial and industrial development and is located at a primary east-west rail corridor serving the nation’s third largest rail hub. Sites range from 10 acres – 200 acres.

• Hartford Logistics Park – Located in Madison County, Ill., this park offers nearly 400 acres of land available for built-to-suit projects for buildings up to ±1.5M with potential rail access. 

• Earth City Industrial Sites – The Earth City, Mo. submarket is a large industrial hub of nearly 3,000 acres of industrial construction. Links to 8 new site listings were recently added to the Earth City section.

• Wentzville I-70/I-64 Real Estate Sites – Wentzville, MO, is the location of the GM Wentzville Assembly Plant and is at the intersection of Interstate 70 and Interstate 64. Highly desirable buildings and land sites are available ranging from 18 acres – 50 acres. 

Check out these sites and the other bi-state St. Louis sites at the St. Louis Regional Freightway’s website:  www.thefreightway.com/real-estate/

Opus chips in on the 2020 industrial market boom

The Opus Group is chipping in on the ever-expanding 2020 industrial market, this time in Earth City, Mo.

Johnstone Supply, a leader in the HVACR industry, will anchor their new headquarters and distribution center on four acres of the 13.5-acre development. Construction of their 45,000-SF space is scheduled to begin this month.

“Our team has been grateful to work with Opus throughout this process and we’re eager to see this project through to completion. Our new building allows us to expand our business, offer additional educational training courses and bring new jobs to the community," said Larry Wines with Johnstone Supply.

Upon opening, Johnstone Supply will occupy 10,000 SF for the company’s headquarters, which will include a training room and product showroom. Centralizing these facilities under one roof will allow the company to further establish its presence in the St. Louis area.

“Our team identified this location as one of the last developable sites in Earth City. Through the expertise of our integrated team and strong broker relationships, we’ve been able to work closely with St. Louis County to develop a modern industrial building that will meet the demand for local, regional and national industrial users," said Ryan Carlie, director of real estate development at Opus.

Opus also plans to begin construction this month on an 111,000-SF speculative industrial development on the remaining 9.5 acres. 

The addition will accommodate multiple tenants, offering 139 parking stalls, 32-foot clear height, 27 dock positions, including two drive-in positions, and clerestory windows. With immediate access to Interstate 70 and directly off of state Route 141, this project offers accessibility and external visibility.

Opus is the developer, design-builder, and architect and engineer of record. Jake Corrigan and Vince Bajardi with Sansone Group will be marketing the project for lease.

Construction on both buildings is expected to be complete in early 2021.

Elite Printing & Packaging moves to Hazelwood TradePort

Elite Printing & Packaging is making plans to relocate to Hazelwood TradePort, a new construction space being built by Brinkmann Constructors at 1601 TradePort Dr. in Hazelwood, Mo.

The move will be an upgrade for the one-stop packaging solutions provider, who is currently located in Wentzville, Mo. The NorthPoint Development warehouse will not only be larger at 124,952-SF, but also more centrally-located —two criteria the owners are in need of.

Timothy C. Convy, CPM and Brian G. Kelley with Avison Young | St. Louis exclusively represented the tenant, Elite Printing & Packaging.

“They made one of the most important decisions in our companies history go smoothly from start to finish. We are very appreciative of Tim and Brian from Avison Young for their guidance, ethics and integrity. We would highly recommend them for all of your companies commercial needs," said Elite Printing & Packaging president, Michael Sloan.

Elite Printing and Packaging has over forty years combined experience in the printing and packaging industry, with an emphasis on the sports nutrition/beauty, pet and health industries.

“We are pleased to provide Elite Printing & Packaging a fantastic solution for their real estate needs. Even with the challenges presented in the St. Louis market, we were able to come to favorable terms with NorthPoint Development to create a dynamic opportunity for our client," said Kelley.

About Avison Young: Avison Young is headquartered in Toronto, Canada and comprises approximately 5,000 real estate professionals in 120 offices in 20 countries. The firm’s experts provide value-added, client-centric investment sales, leasing, advisory, management and financing services to clients across the office, retail, industrial, multifamily and hospitality sectors.

Kadean Construction kicks off $2.3 million warehouse expansion

G.H. Tool & Mold, a division of Tooling Tech Group (TTG), has begun construction on a $2.3 million expansion at 423 W-W Industrial Park Dr. in Washington, Mo.

General contractor Kadean Construction recently broke ground on the metal warehouse project, adding 21,000 SF of space to the existing 40,000 SF-facility. The original space will remain the bread-and-butter of the company, who manufactures tooling for the die cast and aerospace industries.

"The addition will house two, 60-ton bridge cranes, which are used for moving materials in the manufacturing area within the building," said Scott Rakonick, senior project manager for Kadean Construction.

The addition will also include a large, double-column bridge mill with a 70,000-pound capacity.

"The Kadean team has been a pleasure to work with and our project is running right on schedule so far. They are a very knowledgeable group and are running the project very efficiently," said Dave Graves, president of G.H. Tool & Mold.

Other project partners include Washington Engineering & Architecture, Inc. and Varco Pruden Buildings.

The project is expected to be complete in the third quarter of 2020 and bring on approximately 25 more employees over the next five years.