E-commerce the Aim for New Distribution Hub
Monday, July 14th 2014
NASHVILLE, TN – Brothers Whitfield and Hayne Hamilton are aiming to lure more e-commerce to the Nashville market with their latest distribution hub.
The Hamiltons lead the Nashville office of California-based Panattoni Development Co., known locally for industrial projects. Their newest site is the CentrePointe Distribution Park in La Vergne, southeast of Nashville.
The Hamiltons will start with a 600,000-square-foot building there, though they have room to more than double that total footprint. Successfully landing another e-commerce tenant or two would further establish that sector as the latest driver of demand for Nashville’s industrial space, on the heels of companies like Amazon and Starbucks arriving or expanding.
“The e-commerce business is growing faster than they can plan. There are a lot more e-commerce deals just waking up and needing space,” said Whitfield Hamilton, who is based in Nashville and oversees the company’s Southeastern projects. “We feel like there’s enough legs to go ahead and get a building up. It’s the right time.”
The estimated $22 million project is ‘spec,’ or speculative, meaning there will be no tenants in hand when construction begins. There are lingering questions about whether the market is ready for that right now.
The Hamiltons say this will be Nashville’s first industrial spec building since they finished buildings in 2008 — just when the Great Recession was roaring to life and bringing the real estate business to its knees.
Those buildings are at Beckwith Farms, a Panattoni development located in Mt. Juliet, along I-40 due east of Nashville. That “due east” corridor is the region’s fastest-growing industrial market, said Dave McGahren, a veteran broker with Cassidy Turley who often works with the Hamiltons.
CentrePointe Distribution Park is in Rutherford County, southeast of Nashville on I-24. At the end of last year, Panattoni paid $4.86 million for 108 acres there.
The site will be graded beginning late next month, the Hamiltons said. Grading will take three months to complete. Panattoni’s sister company, Alston Construction Co., will build the facility.
McGahren, the Cassidy Turley broker, said e-commerce is the latest driver of demand for industrial and distribution space in the Nashville region.
Automotive has been a traditional source of demand, with 30 top-tier suppliers within 250 miles of Nashville, said McGahren, who has been in this market for almost all of his 30-year career. There’s a tech presence with Dell, HP, a Chinese laptop manufacturer and CEVA Logistics. Gap, Federated Stores and Starbucks — not to mention Amazon— round out other big names with Nashville distribution hubs.
McGahren said he sees less risk in Panattoni going ahead now with a spec building, mainly because of its size. McGahren said having more than 500,000 square feet under one roof is uncommon in the Nashville market right now.
“There’s very limited supply. You’ve barely scratched the surface,” McGahren said.