Duke Realty Signs 1.4 MSF Savannah Deal
- Sep 19, 2016
By Barbra Murray, Contributing Editor
Savannah, Ga.—Duke Realty Corp.’s standing as the largest industrial/warehouse owner in Savannah gets reinforced with the industrial and medical office REIT’s agreement to develop a build-to-suit distribution center for Floor & Decor. The hard surface flooring retailer will lease the 1.4 million-square-foot property from Duke Realty.
Atlanta-based Floor & Decor will occupy the facility under a long-term lease orchestrated on its behalf by commercial real estate services firm CBRE. The building will be erected on a 90-acre site within the Morgan Business Center, a 250-acre park sited roughly 10 miles from the Port of Savannah, which, according to a recent seaport and logistics report by CBRE, was the fastest growing port in the country in 2015. The Savannah port also ranks as the fourth-largest U.S. port in terms of container port traffic volume. It’s all about location.
Brian Robbins, an executive vice president with Floor & Decor, said in a prepared statement, “The location of this new distribution center will allow us to efficiently manage our import operations and serve our retail outlets in the eastern portion of the United States.”
Duke Realty, which has a longstanding relationship with Floor & Decor, will commence development of the flooring retailer’s new distribution center in November 2016. The project marks one of the largest development undertakings today in the Savannah area’s thriving industrial market. As noted in another CBRE study, with the Port of Savannah functioning as the main staging area for products being distributed to five million customers across the region, and with Atlanta serving as a major logistics hub for the East Coast, demand for industrial space in Savannah is extremely strong. The cry for accommodations has grown loud enough to push the city’s industrial vacancy rate down from approximately 10 percent to an enviable 2 percent over the last three years.
“Like many of its industrial markets across the country, the Savannah market is in excellent shape. The positive demographics in the southeastern U.S. and the growth in e-commerce is fueling industrial demand,” Chris Brown, a senior vice president with Duke Realty Corp., told Commercial Property Executive. “Savannah is benefiting from these factors along with the pro-active nature of the Georgia Ports Authority and local jurisdictions like Bloomingdale, Georgia. Duke Realty’s Savannah portfolio was 100 percent occupied at June 30, 2016, a reflection of this market’s appeal.”
Duke Realty owns 6.4 million square feet of industrial space in Savannah’s port market; however, even with a fully occupied portfolio and hearty demand in the area, the REIT isn’t going to get construction happy. “Duke Realty continually evaluates investment alternatives in all of its markets, but currently has no plans for speculative development in Savannah,” Brown said.
Duke Realty is on track to complete construction of Floor & Decor’s distribution facility in time for the company to relocate to the new site in early 2018.
Image courtesy of visitsavannah.com