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ATLANTA-Locally based IDI is investing an estimated $60 million in two new spec bulk distribution buildings totaling 1.11 million sf at the Hamilton Mill Business Center in the Northeast/I-85 submarket in Buford. All total, IDI has developed 108 million sf of industrial product in the past 17 years valued at $4.7 billion.

IDI has broken ground on a 303,815-sf building (Building D) and is four months away from completing its largest industrial project developed so far in metro Atlanta, an 870,480-sf distribution facility (Building I). Area construction sources tell GlobeSt.com the buildings are probably going up at a hard construction cost of $45 to $55 per sf, or an estimated aggregate total of $60 million.

An IDI representative tells GlobeSt.com his firm “generally doesn’t disclose construction costs…but your numbers are in the ball park.” IDI plans to develop, in future phases, up to 13 buildings totaling four million sf at Hamilton Mill. Based on a current average hard construction cost of $50 per sf, that would make IDI’s estimated investment in the 13 structures at about $200 million, according to local construction sources familiar with comparable industrial projects.

Jay Mitchell, vice president and regional development officer in IDI’s Atlanta regional office, says the decision to proceed with the construction of the two new buildings was based “on the steady growth and strong [tenant] demand” for bulk distribution product in the 131-million-sf Northeast/I-85 corridor. In a prepared statement, Mitchell calls the corridor “the largest submarket in metro Atlanta” and says “this is a favorable time to develop a new bulk distribution facility, especially considering the current strong tenant activity and our strategic location within the submarket.”

Although the two new buildings have no signed tenants to date, Mitchell is confident the properties will lease up quickly, based on IDI’s experience with the 647,228-sf Building M, currently the developer’s largest structure at Hamilton Mill Business Center. He says Global Equipment Co., which signed a 517,628-sf lease in December 2005, is expanding into the remaining space, giving Building M 100% occupancy.

The 303,815-sf Building D, scheduled for completion in January 2007, is being targeted for users of 75,000 sf or more, Mitchell says. The 870,480-sf Building I is being marketed to users requiring at least 500,000 sf. The recently completed 131,042-sf Building B already has its first 40,187-sf tenant in the RiteScreen Co., Mitchell says. Office Depot occupies the entire 550,000-sf Building H.

Mid-year market research from the Atlanta office of Cushman & Wakefield of Georgia Inc. supports Mitchell’s confidence in the Northeast/I-85 submarket. The C&W data show an overall vacancy rate of 10.6% among 1,796 buildings. A total three million sf has been leased to date with overall absorption of 1.47 million sf. Under construction is 2.31 million sf of new product with only 497,482 sf completed in the past six months. The direct weighted average net rental rate is $4.56 per sf.

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