Grooters Keeps Adding Space

December 15, 2003
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GRAND RAPIDS — Robert Grooters Development Co. added some 2.4 million square feet of space to the West Michigan industrial market this year.

The firm reports building 905,000 square feet of space and developing an additional 1.6 million square feet during 2003 — about 20 percent more than it originally predicted.

The company completed construction of a 165,000-square-foot industrial facility at 52nd Street and Kraft Avenue that is the first of three buildings on the campus. Grooters is ready to start construction of a 41,000-square-foot building on the campus and just received final approval for a third, larger building.

“We need to lease about three quarters of it before we get started, so we’re working on the leasing now,” said Pete Colvin, a Grooters broker.

“We’ve already got three good prospects for the building.”

Collectively, the three facilities at 52nd and Kraft will add 550,000 square feet to the local industrial market.

In July, the company completed construction of a 200,000-square-foot building on 20 acres at 84th Street and U.S.131. The structure currently has two tenants, and 50,000 square feet of space remain for lease. Colvin noted that enough adjoining space exists to permit the company to expand it by 65 percent — another 130,000 square feet.

At 3056 Walker Ridge — just off Interstate 96 in Walker — Grooters finished the first phase of what will be a 335,000-square-foot facility on a 20-acre lot. Some 67,000 square feet of space is available for lease. 

The company also reports it is getting ready to add another 125,000 square feet to its development at 8715 Byron Commerce Drive in Byron Center.

In downtown Muskegon, Grooters is working on a 400,000-square-foot development in Seaway Industrial Park that involves two buildings on 15 acres. The project is in a designated Renaissance Zone and Colvin said the company is currently working with two other firms to complete a large campus at the site near the Muskegon Lake waterfront.

The company also plans to build an additional 250,000 square feet onto its 3-year-old Union Station development in the rail yards along U.S. 131 in Grand Rapids. The station is now fully occupied.

Union Station is located in a Renaissance Zone, and the company succeeded in getting a Renaissance Zone expansion to cover the new square footage, which will be built for manufacturing.

“We’re finishing the acquisition of the property right now. We plan to start as soon as we can,” Colvin noted.

Among other projects during the year, Grooters constructed a log-cabin style office building on the East Beltline just north of Celebration Village.

Grooters just received site plan approval for a 600,000-square-foot manufacturing facility at M40 and I-96 in Holland that can be built out to serve one or several companies. 

Grooters changed its strategy this year and did more pre-leasing and more build-to-suits in 2003 than any year before.

According to Colvin, that strategy turned out to be a huge success.

For one thing, he explained, pre-leasing and pre-selling activity drastically reduces risk for a developer. He said it’s not only a better risk management strategy, but it’s also a more profitable strategy. 

“We used to put up a 250,000-square-foot empty building and then wait for people to come.

“By pre-leasing or pre-selling a building before building it, as soon as it’s done we have no holding costs.

“We do all the engineering, get the site plan approved and get it ready to build and then go out and find tenants for it. Once its site plan is approved by the municipality, it’s our inventory and we can go out and offer it.” 

Colvin noted that Grooters is dealing with more manufacturers now than it ever has in the past, and the new strategy benefits them, as well.

“This way we can really customize a building for a company,” he said. “We’re doing a lot more preplanning with companies and then building exactly what they want.”

The end of 2002 was challenging because there was so much space on the market, Colvin recalled.

Grooters decided to lower its prices to vendors — the steel, concrete, excavating and dry wall companies it works with — so it could build new buildings for less than the price people had to pay for older buildings on the market, he explained.

The company also built heavily in tax abatement districts.

“Most of our properties are in tax abatement districts, which was planned that way so we could get customers tax abatements with a customized new building for about the same as if they went and bought something old and had to fix it up.”    

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