The massive new AllPoints Midwest industrial park in Plainfield has landed its first tenant in a mega deal that likely will
be the area's biggest industrial lease in 2007.
Local logistics firm Prime Distribution Services Inc. has signed a lease for 1.2 million square feet in the 920-acre park, a joint venture between Indianapolis-based Duke Realty Corp. and Browning Investments Inc.
Prime will fill AllPoints Midwest's nearly 650,000-square-foot speculative building and eventually will expand the facility to double its size. The company also has an option to add a second 400,000-square-foot building, potentially bringing its total presence to 1.6 million square feet.
"This is very, very important not only for AllPoints to kick off their park with the biggest lease deal in recent history, but to the market because we've seen so little activity on the very large distribution deals this year," said Steve Schwegman, an industrial broker and principal with Indianapolis-based Meridian Real Estate.
Locally based NAI Olympia Partners represented Prime Distribution Services in the deal; Duke and Browning represented themselves. The parties declined to disclose terms of the lease other than to say Prime was getting a "competitive rate." Lease rates average about $3.60 per square foot for bulk industrial space in the Plainfield submarket, according to statistics from Indianapolis-based Summit Realty Group.
Prime will move into AllPoints Midwest in phases, with its headquarters moving from a warehouse at 4350 Airport Expressway to the new park in March. The remainder of the 1.2 million square feet should be occupied by 2009 once Prime moves out of two other local warehouses.
The company, which consolidates shipments from smaller vendors for national big-box retailers, has 176 full-time employees here and another dozen workers at warehouses in Mesquite, Texas, and Stockton, Calif.
Prime expects to add 48 jobs in Indianapolis through 2010 to keep up with growth. The Indiana Economic Development Corp. has agreed to give Prime up to $225,000 in performance-based tax credits.
The company was drawn to AllPoints Midwest because of its easy access to interstates, the airport and rail lines. Plus, the move kept it in familiar territory.
"We've grown comfortable on the west side of Indianapolis," said Kevin Salwin, Prime's director of corporate administration. "And it wasn't such a large move that we'd be looking at masses of people who couldn't make the move with us."
Having the option to add another 400,000 square feet next door didn't hurt, either. Observers think Prime will use that space eventually.
"I think they will fill [the leased space] and, if the projections are accurate, they will be pulling the trigger on that expansion space," said Michael Lubbers, the NAI Olympia principal who represented Prime in the deal.
The AllPoints Midwest lease is the largest central Indiana deal in recent history, rivaled only by the 1.1-million-square-foot Gatorade build-to-suit project in Ameriplex signed in June. And it outdoes recent years' highs, which topped out at 813,054 square feet in 2004.
The lease also is a coup for the town of Plainfield, which is luring the company away from Indianapolis. The town invested heavily in infrastructure for the park, including utilities and the soon-to-be-completed extension of the Ronald Reagan Parkway north to County Road 200 South.
Successfully filling the spec space also reaffirms Plainfield's policy of allowing a standard, 10-year tax abatement on such potentially risky construction, said Kent McPhail, Plainfield town councilor and executive director of the Plainfield Chamber of Commerce.
"It's a huge jump-start for the park," McPhail said. "It's a feather in our cap."
The Hendricks County Economic Development Partnership also helped pitch Hendricks County locations to Prime and line up incentives.
"It's a new tax base for us and a perfect location for [Prime's] distribution needs," said Executive Director Cinda Kelly. "And it's a home-grown company we wanted to retain in Indiana."