Partnership Finds New Use for 780,524 SF

The former Albertson's-Fleming distribution center, which contains refrigeration and cooling storage areas, is situated on 118 acres at 420 S. 145th E Ave. Built in 1999 as a regional warehouse and distribution center for Albertson's LLC in Boise, ID, the asset has been sold twice, held in lieu of foreclosure and has been to the auction block two times. Many breathed a sigh of relief when TranAlliance Development Group, owned by Tulsa brothers Stuart and John Price and Ivan Crossland of Crossland Construction Co. Inc. in Columbus, KS bought the asset from LaSalle Bank Corp. in Chicago, through CW Capital Investments LLC of Needham, MA.

The new owners renamed the entire project Crossroads Warehouse and already have new tenants. United Warehouse Co. Inc. recently leased 200,290 sf, while Cherokee Nation and Crane Carrier Co. Inc. have taken down a combined 130,000 sf. The next-door build-to-suit will be ready in June for its tenant, Panalpina Inc., a shipping company headquartered in Basel, Switzerland. The quoted lease rate on the space is $3.50 per sf, triple net, on an annual basis.

But the cooler/freezer space has been a harder sell. Brian Hunt, VP with CB Richard Ellis-Oklahoma in Tulsa, acknowledges the facility has had a difficult history, especially because it's a specialized building. He says the freezer room takes up approximately 70,000 sf, while the refrigeration area claims 225,000 sf.

"The cooler and freezer space is what's made marketing this property difficult," says Hunt, whose CBRE colleague, VP Robert Pielsticker helped negotiate the sale to TranAlliance. Hunt, who is familiar with the asset, says retrofitting the spaces would be difficult and costly. Furthermore, the owners have already made a capital investment to turn a single-purpose warehouse into multi-tenant flex space.

The market, however, is on the owners' side. "We've had a tight market, especially in terms of large spaces available," Hunt tells GlobeSt.com. "Part of that is due to the fact that we simply haven't been a large, speculative market."CBRE-Oklahoma's MarketView report on industrial property in Tulsa supports Hunt's statement. According to year end 2007 statistics, the area has a 4% vacancy out of a 2.3-million-sf inventory, though a 505,000-sf bulk speculative warehouse development is on the drawing board. Still, with 60,000 sf of class A warehouse space vacant in the area, space is tight.

As a result, things might be looking up for the facility with the interesting past. Hunt says TranAlliance Development may have a potential tenant for the "wet side," and there could be another building on the site. "They may have the potential to build one or two buildings on the remaining land," he adds.