Manufacturing and Real Estate

Grooters secures first tenant for airport development

Office furniture systems and parts manufacturer takes 80,000 SF.

November 27, 2015
| By Pat Evans |
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With limited industrial space in Grand Rapids, Robert Grooters Development Co. has broken ground and secured a first tenant for its newest project.

The developer broke ground recently on its Kraft Avenue industrial space that once was dubbed “Area 52,” a play on the U.S. government’s secret Area 51 in Nevada and its location just off 52nd Street near the Gerald R. Ford International Airport.

Plans for a theme that would tie the huge project together have taken a backseat, so initial thoughts of painting the sides of the buildings facing the airport with various airplanes are on hold for now.

Robert Grooters said Amway Corp. originally envisioned a complex on the site with corporate headquarters on either side and a taxiway down the middle for private jets. When Amway left the development game, Grooters said he scooped up the land.

Grooters said in August that he planned to build approximately 700,000 square feet of space in three buildings all at once. That plan has turned into a four-phase, 800,000-square-foot project.

The first 210,000-square-foot building will be completed by spring and already has its first tenant. Compatico, an office furniture systems and parts manufacturer, will occupy 80,000 square feet of the new building.

Grooters said he is confident other tenants will join Compatico, and the space will be filled before the snow melts.

“We have others that are very close,” he said.

The additional three phases of the project will be undertaken as new tenants show interest and sign up. The prospect of logistics companies inhabiting the space intrigues Grooters due to the site’s proximity to the airport.

“We really like logistics companies, packaging companies,” Grooters said. “They take up a lot of space (and) they don’t destroy the buildings. They’re gentle. They’re easy to transport if a tenant needs more space.”

Other possible tenants would include light manufacturing companies, at least for the building in progress.

“We have to know about heavy manufacturing ahead of time,” Grooters said. “If someone needs the space, we can do thicker concrete floors, more truck docks. But that’d have to be Phase II.”

Grooters said he doesn’t expect the additional phases will stay on the drawing board for long. Colliers International West Michigan’s recent quarterly report found a shortage of local industrial space. There is some vacant space within the Robert Grooters portfolio, but none of it is new construction.

The firm recently finished a 100,000-square-foot building in its industrial park near the airport for Weeke North America, and also has plans for a 35-acre piece of land near its Northridge Industrial Park in Walker.

“The newest industrial space in town was for Weeke; we built it and filled it up,” he said. “It’s been a long time since a supply of brand-new industrial space has been in the market. This is a good time.”

The company develops large “white box” industrial buildings that are scalable for tenants. The large volume allows the developer to keep its rental prices down, near $3 triple net. The buildings are meant to save companies money, Grooters said.

“The rates are low. We want to make West Michigan more competitive. We want the companies to grow. The more they grow, the more space they take up, the more jobs they offer the community. It’s a win-win-win.”

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