Rankin moves on second spec industrial building

After securing an occupant in short order for a speculative industrial warehouse built last year, developer Tom Rankin is at it again, and this time on a larger scale.

“Steel is ready to be erected,” said Rankin, managing director with Sperry Van Ness/Rankin Co. LLC, of his $3.7 million, 81,000-square-foot speculative property in North Creek Business Park off Kearney Street.

This time last year, Rankin was preparing a $2.9 million, 63,000-square-foot spec warehouse at the industrial center he owns with Charlie O’Reilly. His first spec building since the recession, Rankin planned to lease the 30-foot tall warehouse. But Maryland Heights-based Community Tire Co. Inc. made an undisclosed purchase offer, which he accepted April 1.

Rankin said demand for industrial space is increasing, particularly from companies considering an entry to the Springfield market. The current project now is scheduled for completion in December.

“And I’ve got plans after this one to do a 70,000-square-foot building in the same park,” Rankin said. “Provided the demand is still there, I will continue to build spec buildings.”

While Rankin’s warehouse was taking shape in October, Springfield Area Chamber of Commerce officials called on local developers to help address industrial needs during a meeting and tour of the former Solo Cup building.

Recent statistics paint a different picture. According to commercial real estate tracker Xceligent, area industrial vacancies rose in the second quarter.

The latest Market Trends report of activity in Springfield and its six bedroom communities shows a quarterly industrial vacancy rate of 4.9 percent, up from 4.3 percent in the second quarter last year. Industrial vacancies hit a high-water mark above 7 percent in 2011 after the former Solo Cup plant shut down. But that space has filled up piece by piece, and industrial vacancies have settled below 5 percent the last year.

The biggest single industrial transaction in the second quarter was the sale of the 100,000-square-foot ViaTech building at Chestnut Expressway and Cedarbrook Avenue.

CCMC Properties LLC bought the 424 N. Cedarbrook Ave. property April 23 from New York-based D&H Missouri LLC. The new owners, led by Coby Cullins, have moved in workplace safety compliance and training firm National Safety Compliance Inc.

Office improves
In the office sector, second-quarter vacancies improved significantly to 7.5 percent from 8.6 percent at the same time last year, according to Xceligent. Class B properties led the way with over 8,200 square feet of positive absorption. The largest move in Xceligent’s report was Springfield Public Schools’ 29,000-square-foot acquisition at 1610 E. Sunshine St.

District spokeswoman Teresa Bledsoe said SPS actually purchased the vacant office building in January for $1.43 million, and renovations currently are underway for Student Services and Special Programs staff.

A move targeted in October would eliminate a lease deal at 639 W. Chestnut St., she said. On July 14, SPS awarded Larry Snyder & Co. the remodeling contract based on its low bid of $1.39 million.

Considering the reduction in office vacancies, Rankin said the market could soon be ready for spec office construction.

“Lenders, I think, have been less apt to lend on spec office space because there has been some space out there,” he said. “But with the market tightening up, I think we’ll see some spec office coming into the market in the next 12 to 18 months.”

Retail level
The retail vacancy rate inched up to 5.1 percent from 4.9 percent in the second quarter last year.

Among key transactions was Planet Fitness’ lease of the 24,000-square-foot former Price Cutter grocery store at 1730 S. Campbell Ave.

During the quarter, SPS sold 15 acres at U.S. Highway 65 and Chestnut Expressway to Eau Claire, Wis.-based home improvement retailer Menards for $4 million. Jeff Abbott, a spokesman for Eau Claire, Wis.-based Menard Inc., said plans for two home improvement stores still are being developed.

“We hope to begin construction on the Springfield East Menards store sometime this fall, although no official timeline has been established for opening. We’re still finalizing our plans,” he said via email.

“We are also working on the plans for the Springfield West Menards store but are still a bit uncertain about the construction timeline.”