Industial, flex space still a tough sell

Dec 9, 2011

Story by: Jamaal E. O’Neal, posted on WilmingtonBiz.com

Brian Eckel, co-founder and partner of Wilmington-based Cape Fear Commercial, has always been one for strategy.

So when he and his fellow real estate partner decided to pull dozens of industrial lots off the market in North Kerr Industrial Park more than five years ago, it was all part of a calculated plan to beef up industrial offerings in the area.

“We pulled everything off the market in October 2005 to let the demand build up,” Eckel said. “In March 2006, we decided to put all 44 lots in phase three of the [North Kerr] Industrial Park on the market.”
Within two hours of placing phase three up for sale, the real estate brokerage firm sold 41 lots.

“It was the peak of the market,” Eckel recalled. “There was a strong demand for this type of industrial space in the area and the buyers responded.”
That was then, this is now.

Despite a slight increase in retail commercial leasing across the greater Wilmington area, industrial and flex space leasing remains tough, including at the once hot North Kerr Industrial Park.

Cape Fear Commercial is in charge of leasing and maintaining the industrial park along North Kerr Road.

The park, located north of the Wilmington International Airport and downtown, was once the scene of a flurry of development during the peak of the real estate boom. But as the Great Recession tightened its grip on metro Wilmington, many of the plans for new flex industrial space were shelved.

“We have future plans for phase four of the park,” Eckel said. “But we have no intention to develop that phase until we see activity pick up in the industrial sector.”

Flex industrial space typically incorporates about 2,500 and 4,000-sqaure feet of warehouse and office space into one general area.
Rates for such new developments typically range from $7 to $8 per square foot in New Hanover County, but because of the slowdown in industrial growth, those rates have fallen to $5 to $6 per square foot.

Much of North Kerr Industrial Park is zoned light industrial, according to New Hanover County records, making it prime real estate for flex industrial development.

However, finding a tenant to occupy such quarters as greater Wilmington tries to recover from the recession has been no easy task.

“We’re just not seeing that much activity in the park at this time,” Eckel said. “A lot of it has to do with the economy and securing the financing for construction . . . it’s just tough at this moment.”

View the original story at The Greater Wilmington Business Journal.