Wayfair Makes Its Way to Kentucky for Fulfillment Center

Dermody Properties and Hillwood Investment Properties are building a massive distribution facility for the online retailer in Erlanger.

Dermody Properties and Hillwood Investment Properties have started construction on an 898,560-square-foot distribution facility for online retailer Wayfair Inc. in Erlanger, Ky., near the Cincinnati/Northern Kentucky International Airport.LogistiCenter at 275

The facility at 1600 Donaldson Rd. in Erlanger will be known as LogistiCenter at 275 and will complement Wayfair’s current fulfillment center in Hebron, Ky., where it employs 200 people.

“Northern Kentucky is an optimal location for our new operations facility, which will allow us to increase our distribution capacity to support the rapid growth of our business,” Nicholas Malone, Wayfair’s chief administrative officer, said in a prepared statement.

Jon Varholak and John Lashar, both of Transwestern|RBJ, and Jeff Bender of Cushman & Wakefield negotiated the lease deal for Wayfair, an online retailer specializing in home furnishings and décor.

Transwestern|RBJ previously advised Wayfair on its corporate headquarters lease in Boston and distribution facility transactions in Kentucky and Utah.

“We have represented Wayfair since the company’s founding in 2002, so it’s particularly exciting for us to facilitate this significant growth milestone,” Varholak said in a prepared statement. “LogistiCenter proved to be the best option for Wayfair, as the company already has a strong presence in Hebron, Kentucky, and can further benefit from the state’s robust labor force and business climate.”

LogistiCenter at 275 is one of the largest single developments by square footage for Dermody, a Reno, Nev.,-based industrial real estate development company. It is the privately-held company’s third Kentucky project, but its first in this northern Kentucky market. Two other developments are located in Louisville. Dermody recently teamed with another firm, PCCP L.L.C., to build LogistiCenter at 78-81, a 405,000-square-foot distribution center in Union Township, Penn.

It is also the second joint venture between Dermody and Hillwood, a full-service, Dallas-based investor and developer involved with numerous industrial properties in North America and Europe. This summer, Hillwood sold a newly constructed 232,655-square-foot distribution center in Kutztown, Penn., to Duke Realty Corp.

“Dermody Properties is highly focused on markets where e-commerce is a sustainable demand driver,” Douglas Kiersey, Jr., Dermody president, said in a prepared statement. “Wayfair is an excellent example of our target customer segment. We are excited to have broken ground on the new fulfillment center and now turn our focus to ensuring a seamless transition into the facility for Wayfair and its team.”

Dermody and Hillwood leased the 52-acre site in Erlanger earlier this year from Cincinnati/Northern Kentucky International Airport.

“CVG is a premier location for development,” Candace McGraw, Cincinnati/Northern Kentucky International Airport’s CEO, said in a prepared statement. “We are eager to see the completion of this state-of-the-art facility and future opportunities for development.”

Construction of the facility is expected to be finished in the second quarter of 2016. Once completed, LogistiCenter at 275 will have 36-foot clear height and feature energy efficient lighting and roof systems. Paul Hemmer Co. of Fort Mitchell, Ky., is the general contractor