Construction, Economic Development, and Real Estate

Grooters gets back into the game

January 18, 2013
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After achieving iconic status in the industrial real estate market by building roughly 20 million square feet of manufacturing and warehouse space in the metro area, Robert Grooters is at it again.

His highly regarded firm, Robert Grooters Development Co., has plans to build another 1.7 million square feet of industrial space this year, with 680,000 of those going into three “new look” buildings that will be completed this summer. Announcements concerning the remaining 1 million square feet will be released at a later date.

“We have a good heartbeat in the market,” said Grooters. “We’re into plans and specs right now and are working through the budgets. In 60 days, we should be ready to go. We know how to do this.”

The project will get underway with a pair of 300,000-square-foot buildings. One will go up on Byron Commerce Drive, just north of 84th Street SE and near U.S. 131. The other will be built at 52nd Street and Kraft Avenue SE. The third structure, an 80,000-square-foot building, is targeted for Patterson Avenue and 44th Street, near the runways of the Gerald R. Ford International Airport.

Grooters said it will cost his company about $30 for each square foot it builds. At that price, the firm’s investment to construct all that square footage will reach an estimated $51 million. Grooters said Chemical Bank and Independent Bank are involved in the project’s financing.

“They’re backing us. I’m used to being at banks,” he said with a hearty laugh. He also said the time was right to go forward with the projects because land costs and interest rates are low.

Grooters said he has tenants waiting in the wings, all local and looking to expand. Some of the space will be used for manufacturing and some for warehousing. Grooters said he felt there is a growing demand for industrial facilities here and that’s why he is going ahead with the project.

“And we’re creating the demand, too,” said Todd Johns of Grooters Development.

As usual, Grooters said he will hire local contractors for the work; he expects the project will create hundreds of construction jobs this year. He said each of his two best-known non-industrial projects, River House and Bridgewater Place, put at least 400 to work. Union Station, his only industrial building in Grand Rapids, resulted in 1,000 new jobs, he said.

“We’ve never had an issue of quality. We’ve never missed a deadline,” he said.

Grooters developed his strong reputation for industrial development in the late 1980s and 1990s. He made his mark by creating a new concept for that type of construction. He built bigger and more flexible buildings than most. His thought process was that he could reduce his per-square-foot cost by building larger, like creating structures with 200,000 square feet instead of the 50,000-square-foot buildings that were the industry norm. That allowed Grooters to pass the savings on to tenants through lower rent. He also knew that he could divide his larger buildings into sections and have multiple tenants.

“We designed a very standard building that was flexible,” he said. “We built about 20 million square feet, which was the largest amount in the state.”

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