A giant industrial park is being built in OKC thanks to continued booms in e-commerce
The largest ever speculative industrial park is being built in Oklahoma City, fueled in large part by the continued rise of online shopping and home delivery that has only accelerated throughout the COVID-19 pandemic.
The park is speculative, as in build it and hope they will come. No leases have been signed, not even one, for the 400,000-plus square feet of warehouse-distribution space to be available at Southeast Commerce Park by Dallas-based Blue Road Investments.
It's been years since Oklahoma City had a new industrial park this big, and it's the largest one ever started without even one pre-leased tenant, said Brett Price, managing director and industrial specialist at Newmark Robinson Park, which is marketing the park.
"This is the biggest spec development we've had, period," Price said of the project at SE 89 and Pole Road, not far from the national crossroads of Interstate 35 and I-240. "It's the timing. In brand-new Class A product, we're going to run out by the end of the year."
The kinds and number of jobs generated will depend on the types of companies that use the space. Light manufacturing is possible, and that would require more workers than warehouse-distribution.
Last-mile logistics is changing the dynamics of industrial construction
It's open to all comers, but they might as well go ahead and call it Southeast e-Commerce Park.
Chances are the companies occupying the three big state-of-the-art warehouses when they're finished next year will be part of the burgeoning last-mile logistics business that's fueling industrial construction all over the country.
"Last mile" refers to the final leg of goods' journey from manufacturer to buyer. It's the "Amazon effect."
Next-day and same-day delivery of online orders, whether consumer products or parts and materials used in manufacturing, have set the industrial property sector on fire.
Nationally, more than two-thirds of incoming industrial supply already has a tenant signed, CBRE Group recently reported.
I-35 and I-240: a good location, location, location
Technically, it's tilt-up concrete, not bricks-and-mortar, which is typical for big warehouses. Three big ones will go up at Southeast Commerce Park, 180,000 square feet, 145,000 square feet and 77,000 square feet.
“This will be one of the premier industrial parks in all of Oklahoma with state-of-the-art specifications and functionality that will appeal to tenants ranging from 25,000 to 180,000 square feet," said Jeff Hackmeyer, co-founder and managing partner of Blue Road Investments.
The site’s location near I-35 and I-240 was a big draw for the Texas investment group. The facilities will be a short drive from downtown Oklahoma City, Will Rogers World Airport and Tinker Air Force Base.
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Oklahoma City is on the move, functionally, for warehouse distribution
The last-mile phenomenon redefining supply chain logistics has repositioned Oklahoma City for the industrial boom functionally and geographically, Price said.
Oklahoma City used to lose out often to Dallas and Kansas City, Missouri, with industrial site selectors, he said. That last mile has made the 200 miles to Dallas and the 350 miles to Kansas City irrelevant to many because the last mile is where the action is.
Speculative warehouse construction has been rare here. With the newest, best space running out, that's changing, Price said.
"We've never had a large vacancy. We've always built just enough," he said, but demand is overwhelming supply.
He said market-rate industrial projects like Southeast Commerce Park have nothing to fear from potential competition from subsidized developments like one under consideration on 500-plus acres to the east, along I-240 between Eastern and Bryant avenues.
There is that much demand and that little move-in ready industrial space, Price said.
It's a rare silver lining in the coronavirus cloud.
"The pandemic introduced a new consumer base to online sales which led to record transaction activity the past six months," CBRE reported at midyear. "Demand from online sales and online returns (reverse logistics) will be robust in 2021.
"Shipping volume has surged over the past year as retailers and manufacturers rush to replenish depleted inventories from the pandemic and increase 'safety stock' to offset supply chain disruptions, resulting in rising demand for warehouse space."
Spec specs: Speculative specifications
Southeast Commerce Park will have a 180,000-square-foot, cross-dock facility — with loading docks front and back — suitable for immediate sorting, packing and shipping, rather than storage, and two rear-load warehouses, one with 145,000 square feet and one with 77,000 square feet.
All will have 32-foot clear-height ceilings, ESFR (for "early detection fast response") sprinkler systems and 135-foot truck courts with ample trailer parking.
Senior Business Writer Richard Mize has covered housing, construction, commercial real estate, and related topics for the newspaper and Oklahoman.com since 1999. Contact him at firstname.lastname@example.org.