Big lease shows how to adapt on tight deadline 03.07 Atlanta Business Chronicle
By: Randy Southerland
The fighting was fierce in the battle to win a deal for more than 1 million square feet of industrial space for Kimberly-Clark Corp. and Oakmont Industrial; and its broker, CB Richard Ellis Inc., knew they were behind from the get-go.
The multinational consumer-products manufacturing company was seeking a new and expanded distribution center for its Southeast operations. The idea was to consolidate a number of smaller facilities into a single location of somewhere between 700,000 square feet and 1 million square feet and give the company access to its burgeoning Florida market.
"You have a lot of very top-shelf national developers there," said CB Richard Ellis broker Todd Barton, who handled the deal. "Certainly, with a tenant of this stature, it was a very competitive situation."
At least seven other properties in the area were able to meet the company's requirements. The south side of Atlanta and Henry County have one of the Atlanta area's largest concentrations of large warehouse buildings -- 500,000 square feet and larger.
Barton and fellow broker Greg Haynes were representing Oakmont's new SouthPort Logistics Center, where construction was just getting under way on the 108-acre site just off Interstate 75 in McDonough. While the new facility looked good on paper and even more impressive in renderings, it was slow to get off the ground.
Despite its slow start, the facility's ultimate promise proved to be an attractive draw for Kimberly-Clark officials. This 912,000-square-foot speculative building was designed to be expanded to 1.6 million square feet. It contained 36 feet of clear height compared with the usual 32-foot clear. Seven-inch floor slabs were designed to handle additional loads and reinforced joints, according to Tom Cobb, Oakmont's senior vice president for development.
The building also offered a trailer storage capacity that few other facilities could match. "On our site we had the ability to expand up to a total of 736 trailer spots without impacting any of the building function," said Cobb. "We could still expand up to 1.6 million square feet and you still had great circulation around the site."
Separate drives circled the building on three sides allowing trucks to stage on the property. Up to 61 tractor-trailers could queue up.
"We had all these advantages on physical characteristics but they were all on paper," said Haynes. "Our competition had their buildings up and ready to go, and when Kimberly-Clark first came to town all they really saw was our site and people grading."
Company officials made their first site visit May 15 and said they would occupy the then-nonexistent building by mid-September. Other buildings were already or nearly completed and would have no problem meeting such a timeline.
"They had to take a leap of faith with us," said Cobb.
That leap became even bigger when company officials decided to increase space requirements to 1.3 million square feet. That move eliminated many of the previous competitors. Oakmont simply had to build out its full requirement.
"Because we had the construction crew right out there on site, they were [able to] immediately go ahead and expand the building, and it is still expandable," said Barton.
Dealmakers:
• Developer/landlord: Tom Cobb, Richard Rider and Steve Nelsen, Oakmont Industrial Group; Hunt Realty and Prudential Real Estate Investments
• Landlord's broker: Greg Haynes and Todd Barton, CB Richard Ellis Tenant's broker: Ben Logue and Price Weaver in Atlanta, Keith Stauber and Matthew Stauber in Chicago, Colliers
• Attorney: Thomas A. Spillman, Smith, Gambrell & Russell LLP
• Financing: Bank of America
• Architect: Michael B. Randall, Randall-Paulson Architects
• Contractor: Gary Condron, The Conlan Co.
• Engineer: Southeastern Engineering
• Structural engineer: Michael Planer, Pruitt Eberly Stone Inc.
• Landscape architect: Bradford and Associates
