Ambrose Property Group has acquired 85 acres near the Indianapolis International Airport where it plans to develop two massive distribution buildings starting next year, the local real estate company said Thursday.
Ambrose President Aasif Bade said it took about three years and $7 million to assemble the roughly 10 properties that make up the site. The acquisitions involved farmland and several residential properties.
Bade estimated it would take about $80 million to $90 million to develop the two buildings, which are projected to be about 1 million square feet each.
The site, to be called Plainfield Logistics Center, is located at near the southwest corner of Ronald Reagan Parkway and East County Road 200 South, within a few miles of the airport, the Fed Ex Express hub, State Road 40 and Interstate 70. The facilities are expected to feature oversized truck courts, 36-foot-clear ceilings and more than 1,000 parking spaces each.
Bade said construction could start on the first facility as early as next April if a tenant is found to prelease the building. E-commerce tenants are driving demand for such distribution centers, and many of them prefer build-to-suit facilities over existing buildings. For that reason, Bade said he’d prefer to have a tenant lined up before construction.
Nevertheless, Ambrose would consider breaking ground on the first building by the end of 2015 even if a tenant hasn't been found. Strong demand and low vacancy rates for modern bulk warehouse/distribution space in that area would make speculative development a good bet, Bade said.
"We are highly confident that there is still significant unmet demand remaining for modern bulk space in this market,” he said. "It's a high-velocity area for deals, with its proximity to the airport and the Fed-Ex hub."
The area is a hotbed of activity for distribution development. Browning Investments Inc. and Duke Realty Corp. announced last month that they plan to build, on a speculative basis, a 936,000-square-foot distribution building at nearby at AllPoints Midwest industrial park. Wal-Mart Stores Inc. announced in late June that it plans to open an e-commerce fulfillment center in the industrial park
Jake Sturman, vice president of the industrial group at Jones Lang LaSalle’s Indianapolis office, which was hired to market the Ambrose development, said it was likely a tenant would be found before construction began.
“The location is ideal,” he said, “and there’s decent activity already from potential tenants.”
Ambrose is familiar with the Plainfield/Southwest industrial submarket after developing a 403,200-square-foot distribution facility in Plainfield occupied by Hanzo Logistics earlier this year, plus a 545,000-square-foot facility in Clayton occupied by Gordmans Inc. in 2013.