According to Smith, RGI has opened two foreign trade zones over the years, both in New Jersey. Those enterprises "proved to us that this market was as big as we thought," he says. "We selected Cushman & Wakefield to identify a logical joint-venture partner for a national push, and from a list of five we selected IDI." C&W, like Rockefeller Group Development, is an RGI-operating company.

Smith explains that new built-to-suit development will be only one of two methodologies for creating the trade zones. The two firms are also currently assessing existing IDI developments "in Atlanta, Chicago, Memphis and St. Louis in addition to California and Texas," for possible conversion. Speculative development is a possibility down the road, he adds.

The major difference between FTZs and more typical industrial parks revolves around the agreements with the US Customs office, Smith explains. "In the eyes of Customs, FTZs are not part of the US," he says, "so when goods come in to your facility, you still haven't paid duties. Tenants are allowed to file a weekly entry form reporting what has been shipped in. In terms of supply-chain benefits, it speeds the process of getting goods from the port and through your facility.

"The potential here is enormous," Smith continues. "In the industrial world today, it's common for tenant companies to consolidate their needs into very big boxes, and it's not uncommon to see half-million-sf to million-sf deals. We're adding another dimension, the ability to tell big-box users that import goods that we can put them in any major market and help them reap the benefits of a foreign trade zone."

IDI executives could not be reached before deadline.

Instant Insights /

Rockefeller Development Group, IDI to JV on Foreign Trade Zones

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