Rust-Oleum Signs Lease for Up To 850,000 SF

KENOSHA, WI-Rust-Oleum has signed an agreement to lease a new 600,000-sf distribution building here from developer First Industrial Realty Trust. The building replaces plans for two speculative buildings at the new First Kenosha Commerce Center on 70 acres at 88th Avenue and State Route 158, near Interstate 94.

First Industrial bought the property one year ago, and had planned a 135,000-sf building and a 258,000-sf building on the site. However, demand for larger users changed plans, and Rust-Oleum came along to ask for their own building, says First Industrial development manager Mike Powers. He says he can't disclose the length of the lease, only to say it's long-term. "They plan on staying awhile, they leased enough land to expand the building to 850,000 sf," Powers tells GlobeSt.com. "Our investment to build the facility is $28 million." Groundbreaking is slated for this Friday, and the building should be complete by the fourth quarter of 2008. Rust-Oleum has a manufacturing facility in nearby Pleasant Prairie.

Powers says his company still plans on building the two spec buildings. First Industrial closed in October on the final parcel in a 98-acre assemblage just to the south of the 70 acres, across Route 158. "With the activity we've seen, we're very bullish on this market," he says. "We're going to build the facilities on the 98 acres, though the sizes have changed. One multi-tenant warehouse will be 147,000 sf and the other will be 300,000 sf, expandable up to 850,000 sf. We really like that market, and we want to do more development up there." The Commerce Center name has been changed, Powers says, and the new 168-acre park will be called First Park Kenosha.

He says marketing hasn't started on the two spec buildings yet. "We had some inquiries from build-to-suits, we think these buildings will meet that market. They're looking for a little bigger space than we first anticipated," Powers says. Lease rates in the area average $4 per sf for large buildings, and about $5.25 per sf for smaller buildings, he says.