CRG Plans 1 Million Square Foot Industrial Building in Dayton
It sounds crazy. Building a 1 million square foot building with no committed tenants? But that’s the current state of the market for industrial properties as companies seek increasingly more space to support e-commerce business.
You’ve heard of the Dayton’s Project in downtown Minneapolis? The proposed mega-building could be dubbed the Dayton Project.
CRG, the development and investment arm of Chicago-based Clayco, is pitching up to 1 million square feet for a single building on a 65-acre site in Dayton, northwest of the core metro along the Interstate 94 corridor. CRG is pushing ahead on a speculative basis – “spec” in industry jargon – with no signed leases in hand.
The building would be larger than Amazon’s massive warehouse in Shakopee, which is 855,000 square feet. A 750,000-square-foot fulfillment center is currently under construction for Amazon in Lakeville.
The CRB project, which would be the largest spec industrial project in the state, will be called the Cubes at French Lake. “The Cubes” is an industrial property brand for CRG. Since 2018 the firm has broken ground on approximately 18 million square feet of Cubes projects across the U.S.
“We work with some of the largest companies across the country, so we know what types of facilities they’re looking for and where they want to be,” Jeff Lanaghan, CRG senior vice president and partner for its Midwest region, said in a statement. “Minneapolis is the ideal market for The Cubes brand, and we see this as the first of many projects here.”
The CRG project was discussed at the Dayton City Council meeting at the end of April.
Lanaghan told the council that the developer was seeking a variance to allow for the building height to be 50 feet. According to the minutes of the meeting, “He said tenants are looking for taller buildings.”
The council also reached consensus to pursue tax increment financing (TIF) to help pay for infrastructure upgrades connected to the project.
Clayco is a big industry player and ranks as one of the largest construction firms in the U.S. For 2020, the company reported revenue of $3.8 billion.
An overview of the national industrial market from Colliers International reported an industrial vacancy rate for the Twin Cities at 4.1 percent in the first quarter, notably lower than the 5.2 percent vacancy rate seen across the U.S. The industrial market is in strong shape with low vacancy and high demand.
According to the Colliers report, there is already 2.34 million square feet of industrial property under construction in the Minneapolis-St. Paul area. Nationally there is more than 355 million square feet of industrial buildings under construction.
A brand-new company, Edina-based Endeavor Development, kicked off its business earlier this year with three spec industrial projects in Mendota Heights, Brooklyn Park and Eagan.