With demand growing for distribution and warehouse space, a Tennessee-based company is expanding its SouthPoint Business Park in Limestone County with a 400,000-square-foot building that could be used for distribution or light manufacturing.
The planned structure will be the largest speculative industrial building developed in north Alabama. The business park is located off Bibb-Garrett Road, east of Interstate 65 and north of I-565 in a Huntsville-annexed portion of the county.
“This particular building is a big step in our evolution,” said Joe Hollingsworth, the owner and CEO of The Hollingsworth Companies, based in Clinton, Tennessee. “It’s a big gamble on our part, but we can’t think of a better place and a safer place to (take on) that gamble.”
The facility will cover more than nine and a quarter acres, said Jeff Gronberg, the chair-elect of the Huntsville-Madison County Chamber of Commerce board, who spoke at a groundbreaking event last week.
The largest building at the park so far is about 250,000 square feet, according to Tom Mann, the company’s senior vice president of industrial real estate. The latest building, the 11th in the park, is expected to be completed by the third quarter next year, and SouthPoint will then have more than 1.9 million square feet of industrial space, Mann said.
SouthPoint Business Park is already home to companies with distribution operations like Custom Assembly, Aldez and beverage distributor Supreme Beverage Co., and for manufacturers like HDT Global, Redline Steel and Woodbridge Alabama, an automotive parts supplier that makes polyurethane seating.
According to the commercial real estate services and investment firm CBRE, the pandemic has increased e-commerce’s share of total retail sales, increasing the demand for warehouse and distribution space. The long-term outlook for industrial real estate is strong, with e-commerce remaining the major driver, the company reports, but demand will also be fueled for the foreseeable future by diversification of supply chains away from China and companies wanting to keep more inventory on hand to guard against supply chain disruptions.
That’s good news for Jeff Parker, member/manager of Land Services LLC, which is developing the former 34-acre Morgan County Fairgrounds property for warehouse projects.
“We’ve got our first building under construction now,” an 8,000-square-foot project that should be finished in the next 45 days, Parker said. “It’s already leased.”
Jerry L. Smith General Contractors is the builder.
“We’re about to start advertising the property for build-to-suit” projects, in the 10,000-to-20,000-square-foot range, but they could be up to 50,000 square feet, Parker said. He expected work on water and sewer services to be completed at the site last week.
“There are still some mom-and-pop operations who need warehouse space,” he said.
The 400,000-square-foot building at SouthPoint will have a different niche.
Though the move is “a large gamble for the company, the fundamentals are right and, once we get out of (the COVID-19 pandemic), we feel like we’ll be able to supply what people will need to expand,” Hollingsworth said.
“You’re attracting a wide diversity” of industry to the area, he said to the group of area business and elected leaders at the ground breaking. “You’re not government dependent, and that’s a big, big advantage. And you’ve got a good, trained workforce, (though) generally it’s a little stretched. But that’s OK. People will drive for good jobs.”
A 173,888-square-foot building at the business park has been completed and is available for lease, and another 109,080-square-foot building is under construction.
The park is less than 5 miles from Mazda Toyota Manufacturing USA’s plant, which is now under construction and is projected to be completed next year.
The Hollingsworth Companies is the largest non-urban industrial real estate developer and construction firm in the Southeast, with 125 tenants and 18 million square feet of industrial space in 17 states.
“Across our footprint, we’ve had the same amount of serious inquiries as we did in the same period last year,” Hollingsworth said. “We’ve never had to build so fast.”
