California-based CT Realty CEO James C. “Watty” Watson estimates a more than $300 million investment in plans for a 251-acre Westlake Industrial Park distribution center along Pritchard Road.
A partnership of CT Realty and Diamond Realty Investments LLC plans to develop 3.2 million square feet among eight buildings on property purchased April 29.
CT Realty said it will be the largest speculative industrial development in Jacksonville.
Watson said May 10 that the partnership will start with a first phase of more than 1.7 million square feet among three buildings to be completed for leasing in the second quarter of 2022.
The three structures will be 1,010,350 square feet, 416,000 square feet and 320,240 square feet.
“We love Jacksonville, we love the growth story, we love the infrastructure,” Watson said.
He cited Interstates 10 and 95, the railroads and JaxPort as reasons for identifying Jacksonville as a distribution hub.
“Our business is catering to the largest industry tenants, particularly growth fueled by e-commerce,” Watson said.
“We’ve been hunting around the Jacksonville market for three to four years looking for a project that was the right scale,” he said.
The second phase will follow based on market demand. It will comprise almost 1.5 million square feet among five buildings of 250,000 to 425,000 square feet.
The project has not been named, he said.
Watson said the first phase structures will be built simultaneously. No tenants have been signed.
“We build these all over the country and there is quite an array of tenants” that seek buildings of the sizes planned, he said.
“They tend to be the same size market to market.”
He said many of those are retailers who focus on e-commerce; third-party logistics companies; and others.
“We talk with large tenants all over the country all the time,” Watson said.
The Jacksonville market is competitive with industrial and distribution projects as several developers continue building speculative and build-to-suit projects.
“We see an opportunity,” Watson said. “We think there is the need for more space now. That is why we are building so aggressively. We think the demand is there, so we are betting on Jacksonville.”
DRI/CTR JAX Phase I LLC bought 251 vacant acres in Westlake Industrial Park from Southeast Toyota Distributors LLC of Deerfield Beach for $19.5 million. The sale was recorded May 10.
Watson said the land is next to the Southeast Toyota facility.
Watson said Colliers International Executive Director Guy Preston and Associate Director Seda Preston represented the buyer and seller.
CT Realty is based in Newport Beach, California. CTR Logistics JAX LLC is the manager of the Florida LLC.
Watson said Diamond Realty Investments is the U.S. investment subsidiary of Mitsubishi Corp.
Mitsubishi is headquartered in Tokyo and the U.S. office is based in Dallas.
“We have done projects all over the country with them,” Watson said.
He cited Jacksonville’s job growth, housing starts and consumer spending as adding up “to the need for additional warehouse space.”
He also specified growth at JaxPort and “your freedom to develop and freedom to address market needs.”
Watson said CT Realty’s first exploratory trip to Florida was four years ago.
“We narrowed the field to Jacksonville,” he said. It also is active in Atlanta.
“We just think Jacksonville is a great lifestyle alternative, a great growth story and is getting better every day.”
CT Realty said the project extends its presence in the Southeast U.S. as the company breaks ground on 10 million square feet of logistics projects in 2021.
CT Logistics says on its website that it specializes in the acquisition, development and management of distribution, logistics and e-commerce facilities in Tier 1 markets nationwide.
Colliers International reported in its first-quarter Jacksonville Market Overview that the industrial vacancy rate is steady at 5.2% with average rental rates of $7.14 per square foot, up from $6.88 in the first quarter of 2020.
“With nearly 3 million square feet under construction, Jacksonville’s industrial market is on track to exceed 150 million square feet by 2023,” the report said. “New supply seems to be in-step with demand so we are not yet concerned about overbuilding.”
Guy Preston said May 10 there is room for more.
“Corporate America is giving us four-to-six months notice to occupy space, so we have to have product — and we are very low on product,” he said.
Preston said that in the last quarter of 2019, there was good supply so development had kept pace. Then in early 2020, the pandemic shut down the economy and activity stalled, followed by what he called “a tremendous lease-up” in the available space.
Three new speculative buildings will provide locations for tenants wanting a Jacksonville presence.
“When we don’t have that, they bypass us,” Preston said.