ST. LOUIS—Until recently, speculative industrial development hadvanished from the St. Louis area, but the reviving economy haslifted manufacturers and distributors, sent vacancy rates plunging,and gotten developers interested in taking risks again.PCCP, LLC, a real estate finance and investmentmanagement firm, and St. Louis-based TriStarProperties, for example, just formed a joint venture toacquire 45 acres of land for the speculative development of a673,000-square-foot bulk warehouse building at TriStar'sGateway Commerce Center just east of St.Louis.

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As reported in GlobeSt.com, research on industrial activity inthe first quarter showed why speculative projects were feasible.The industrial market recorded 1,795,283-square-feet of positiveabsorption. “That is more than in all of 2013,”Ed Lampitt, vice president and principal ofCassidy Turley in St. Louis, told GlobeSt.com.“And 2013 was an awfully good year.”

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“We haven't had that kind of absorption since 2004,” addedAlex Cain, a financial analyst in Cassidy Turley'sSt. Louis office.

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Although that torrid pace abated in the second quarter, vacancyrates in some sectors are approaching historic lows. The rate forbulk warehouses, for example, hit 4.1%, according toCBRE. Furthermore, the market has less than 10availabilities larger than 100,000-square-feet.

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Development of the new building will begin immediately. It willinclude a 32' clear height, cross-docks, 172 trailer spaces, up to264 car parking spaces, and an ESFR system. The partners anticipatecompleting the project by February 2015.

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Gateway Commerce Center, a fully leased, 2,000-acre industrialpark that includes major tenants such as P&G,Hershey's and Unilever, sits onthe loop of I-270 and I-255 and connects easily with four othermajor interstates, including I-70, I-55, I-44 and I-64.

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“PCCP sees this as a solid development opportunity,” saysJim Galovan, managing director with PCCP. “Thedemand for large space requirements outweighs the availability inthis market, and we believe this quality project will lease upquickly either to a single tenant or several users.”

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.