Watermark Office Park Grows
CASCADE — General contractor A.J. Veneklasen embarked on another phase of the Watermark Center in March, breaking ground on its fourth building in the office park that’s located just off Cascade Road.
It’s the company’s fifth project in the park, starting with the 2000 renovation of the former Lacks Enterprises plating plant into three mixed-use buildings collectively known as Watermark Tech Center.
The next phase of development was construction of two 10,000-square-foot office buildings and the 65,000-square-foot office building that houses Fishbeck, Thompson, Carr and Huber (FTC&H) engineering and architectural firm.
The project Veneklasen now has underway is a $3 million, 30,000-square-foot “Class A quality” office building at 155 Arboretum Drive, between the 127,000-square-foot Watermark Tech Center to the south and FTC&H’s office building to the north.
President Chris Veneklasen said one tenant is already committed to leasing half of the new building and two others are showing “fairly strong interest” in space in the other half.
FTC&H designed the new building using elements such as horizontal and vertical metal siding and brick and glass that match those of the two buildings on either side of it, so the three buildings blend both architecturally and functionally, Veneklasen said.
He said the new office building would feature high ceilings and extensive use of glass to create an open atmosphere. HVAC units will be located on the rooftop, hidden from view on the ground. The building’s shell will be ready for office build-out in approximately three months, and A.J. Veneklasen will customize interior space for tenants.
“We actually have design staff in house so we can meet with a tenant and do a full office layout for them. We help them choose all their floor coverings, wall coverings, blinds and the whole deal, so they kind of get a full, custom package that way.”
All the buildings in the park are linked by common drives and parking lots, and Veneklasen plans to build a fifth structure — another 30,000-square-foot office building — as the final phase of the project. It will be a nearly identical “sister” to the building now under construction and will sit just southwest of it, Veneklasen said.
“If we are able to lease this one up, we would start on that one right away,” he remarked.
He estimates the firm has some $18 million invested in the park to date, and will have about $21 million invested when the final phase is completed.
The Veneklasen company typically maintains ownership of the buildings it develops and handles leasing and management through its AJV Management division.
“It works out really well, because we already have the personnel and the resources to handle any maintenance request and things like that,” Veneklasen explained.
“But in many cases, we’ll partner with a tenant that wants to occupy a portion of the building and are looking for a good investment, but maybe it isn’t feasible for them to build a building. We’ve done leasebacks where they’ll lease it for an amount of time and then buy it from us.”
CPR, for example, purchased the middle building in the Watermark Tech Center and the other two buildings in the center are leased out. Veneklasen noted that when it comes to build-to-suit, a lot of tenants want to mimic the high-tech, open-office style that CPR initiated with its interior layout and design.
The two 10,000-square-foot buildings toward the front of the business park were recently purchased outright, one by a law firm and another by an environmental testing firm. Veneklasen said the company is in negotiations right now with a business that wants to purchase a portion of the Tech Center.
“We are very flexible. We basically do whatever we can to suit a buyer’s or leaser’s needs,” Veneklasen added.
He referred to the new building as a “Class A quality” building that will be leased at below market rates. Veneklasen said the company developed a building like it in Kalamazoo that was very successful. It’s a building with more of “a techie feel,” he explained, and its design allowed for some cost savings on building infrastructure.
“The building’s environment is as good or better than one you could find anywhere, but because we were a little more creative with the design, our costs are lower. So we’re able to offer it at a better rent, which makes us more competitive in the market.”
FTC&H signed a long-term lease because it’s in a very specialized built-to-suit building, but Veneklasen said long-term leases aren’t that common.
“We’d like to get at least a three-year — if not a five-year — lease from a tenant. Five years is a pretty solid lease.”
The Veneklasen company specializes in new and remodeled office, retail, commercial and industrial projects. It serves small- to medium-sized businesses as well as Fortune 500 companies in West Michigan.
A.J. Veneklasen owns, leases or manages other properties in town, including four 20,000-square-foot buildings that make up Alten Oaks Office Park in Grand Rapids; two 20,000-square-foot office buildings in Grandville; and a 12,000-square-foot office building in Rockford. The company is just starting construction of an office park on the East Beltline, just south of Five Mile Road, that consists of four 20,000-square-foot buildings.
Veneklasen said development has always been a “quiet part” of the company, but it’s an area that has grown over the past decade. But, he said, the company is “always a general contractor first.” In most cases, he explained, the development projects have stemmed from clients’ needs.
“Alten Oaks Park, for example, started out with a client that needed office space and really wanted to be in that area. We came across a project that seemed like a good fit, so we ended up developing a larger parcel. It’s typically client driven because we do a lot of business for other developers in town and we’re very careful not to compete with them.”