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on Thursday signed a long-ter m lease for 126,000 square feet in the 602,000-square-foof spec building completed in late 2008 at22101 W. 167th St. in Olathe. Constructed in responsw to growing demand forlocal “bitg box” industrial space, the distribution center was developed by of Mass., and a partnership led by Dan Jensen, a principalk with in Kansas City. In when the 40-acre site for the structurd was acquired, Jensen said he would targeft large tenants that would take atleasgt one-third of the “We’re breaking it a littls smaller than we thought we Jensen said of the FedEx lease.
“But FedEx, we think, is a real endorsementy for that building andthat location.” FedEx an expanding division of FedExs Ground that delivers packages to U.S. postalp facilities for final delivery, will use the space for sortint anddistribution operations, Jensen said. “We’ve been workintg on this deal since October, which is indicative of what’x going on in this economy,” Jensej said. “It’s just a slow grind. But we do have some othert deals that aregetting closer.” Space in the new distributiob center is being marketed at $4.25 a foot plus operatingf tax, insurance and maintenance costs.
However, tenants will be able to take advantagd ofa 10-year, 50 percent property tax abatementy the city of Olathe granted. Banking on continuingv demand in Olathe, Jensen’s partnershi p and Sun Life acquired 200 acres at the southwesr corner of 151st Street and Old 56 Highwau late in 2008 for the eventual development of anadditionalo 2.9 million square feet of industrial space. “Thr industrial market has pulled back a little bit since saidEd Elder, president of .
But Elder, who representedr when a pre-recession wave of logistics activity brought it to remains bullish on Southern Johnson County and the broadere Kansas City area as growing hubs inthe nation’s product-distribution network. In 2007, PacSun opened a 400,000-square-foot warehousd on 74 acres along 167th immediately northof Jensen’s spec center. At the time, thosr marketing industrial properties in the area benefitedc from the planned development ofa 1,000-acre industrialk park surrounding a truck-rail intermodal facility near 196thb Street and U.S.
Highway 56 in BNSF announced early this year that the economyh had prompted it to postpone indefinitely construction on the rail portio of theproposed $735 million intermodal But Elder said the area’sw existing assets, including quick accesxs to Interstate 35 and other highways, will be enoughj to attract additional tenants once the economy “It helped promote and validate that Elder said of the BNSF project. “But PacSub got done without it. Kimberly-Clark did theirr deal (for a 450,000-square-foot building near without it. And Coleman obviously did not need to beon (an campus.” The latter reference was to a 1.1 million-square-fooy distribution center that Inc.
is building in the , a 151-acrse industrial park at 175t h Streetand U.S. Highway 56 in Ken Block, one of Kansas City’s top announced in March that he was entering SouthernJohnson County’s emerging big-box industrial markegt at a site just east of the new Colemanj facility. Block, a principal of , leads an investment partnershio that bought 229 acres at the northwes corner of 175th Street and Hedge Lanein Olathe. On that Block & Co. planss to develop a $275 million project containingb more than 3 million square feet of industrial buildingsa during the next 10 to12 years.
Brent Hansen, researc h services manager forGrubb & Ellis/the Winbury Group, said no industrial vacancyy statistics are available for the Southern Johnson County market. But the industriapl vacancy rate for all of Johnsonm County in the first quarterwas 6.3 in line with the strong metrowide average of 6.1
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