Construction, Manufacturing, and Real Estate

Grooters pushes aggressive construction timeline

April 15, 2016
| By Pat Evans |
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RGDC
The new industrial complex, which will eventually feature 800,000 square feet of space, is located near Gerald R. Ford International airport. Photo by Pat Evans

With industrial space in Grand Rapids at a premium, Robert Grooters Development Co. is moving ahead quickly on its new facilities near the Gerald R. Ford International Airport.

Construction on the 210,000-square-foot first phase of RGDC’s Kraft Avenue development near 52nd Street SE is finishing up, and steel already has been ordered for the second phase of a four-phase project.

The first tenant, Compatico, moved into 85,000 square feet of space April 1. RGDC officials are hopeful an additional 20,000 square feet will be filled by Compatico, an office furniture systems and parts manufacturer.

The facility once dubbed “Area 52” by Robert Grooters will see a second tenant, as yet unnamed, move into the second 105,000 square feet of space June 1, according to RGDC Business Development Representative Todd Johns.

The second tenant might end up needing an additional 67,000 square feet in the second phase of construction, which is slated to start within the next 30 days and finish by Nov. 1.

The timeline has been aggressive, Johns said, and Wolverine Construction has kept pace throughout.

“We’ve secured a company that is pushing us to get going,” Johns said. “I was able to convince everyone to pull the trigger.”

When RGDC announced the Kraft Avenue development in August 2015, the plan was to build 700,000 square feet in three buildings all at once. An updated site plan was created in November that spreads 800,000 square feet over four buildings.

The new industrial space is desperately needed in Grand Rapids, according to several market reports from area real estate firms, including Colliers International West Michigan and NAI Wisinski of West Michigan.

RGDC is currently the only industrial developer with new inventory; however, there are some owner-occupied industrial developments, including a Lacks Enterprises facility, also near the airport.

Johns said RGDC isn’t developing on speculation, however, and is working with clients throughout the development. He said there are several discussions ongoing for the second phase of the construction, which is what pushed the company forward to begin building.

The third and fourth phases will commence once potential tenants are found. The third phase of the development will be a 350,000-square-foot building, and the fourth phase will be 250,000 square feet. Once the second phase is completed, a thoroughfare will run through the industrial park from Kraft Avenue to 52nd Street.

Johns said tenants and potential clients aren’t necessarily coming to RGDC asking for the new space to be built.

“It’s interesting. The clients I’ve generated (are by) us selling,” he said. “We plant the seed, keep watering it, and then here comes a deal. They’re not just saying, ‘Hey, we want this.”

RGDC has owned the property for several years, following original discussions with Amway Corp. to create an office park with a private jet taxiway.

There are some other vacancies in RGDC’s portfolio, but none of them are new. The firm also recently completed a 100,000-square-foot building for Weeke North America.

Johns said aggressive rental rates — approximately $3 triple net — help with attracting clients with growth potential.

The new development’s proximity to the airport, along the runway, also is enticing to clients. There is some speculation the next phase might have offices facing the airport. In any case, RGDC’s new industrial space is helping garner attention for West Michigan, Johns said.

“There’s a lot of energy for it,” Johns said. “There isn’t a lot of extra space out here, so we’ve gained a lot of traction and attention because of the new buildings with attractive lease rates.”

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